Gold continues to show further weakening
James Chen September 12, 2014 3:49 PM
<p>Gold (daily chart shown below) has continued to decline in correlation with the US dollar’s recent marked strength. The precious metal has just hit a […]</p>
Gold (daily chart shown below) has continued to decline in correlation with the US dollar’s recent marked strength. The precious metal has just hit a new seven-month low and continues to show signs of further weakening.
After breaking down below a large triangle consolidation pattern early last week, the price of gold continued its bearish momentum to plunge below 1265-area support and now tentatively below the 1240 level that was the most recent major low hit in June.
Lending to the bearish technical picture is the fact that the 50-day moving average has just crossed below the 200-day moving average, a condition that has not occurred since early 2013.
Having declined steadily for the past month from a mid-August high around 1320 down to its current position in the mid-to-low 1200’s, gold’s prospects continue to appear dim.
The major downside target for the precious metal continues to reside around the 1180 double-bottom low, which was last hit at the very end of last year. Key upside resistance within the current bearish trend now resides around the noted 1265 area.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.