Gold continues to show further weakening

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 […]


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By :  ,  Financial Analyst

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.

 

Gold-Daily-Chart-Technical-Analysis-12092014

 

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.

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