Gold descends to new 2014 low
James Chen September 22, 2014 6:56 PM
<p>Gold (daily chart shown below) has continued its sharp descent of the past month-and-a-half and has begun the current trading week by establishing a new […]</p>
Gold (daily chart shown below) has continued its sharp descent of the past month-and-a-half and has begun the current trading week by establishing a new low for 2014, just above the 1200 level.
The precious metal’s decline runs in close inverse correlation with the recent marked strength of the US dollar. This dollar strength is especially notable in the USD/JPY currency pair, which has continuously established new multi-year highs in recent weeks.
Having plunged below a large triangle consolidation pattern three weeks ago, the price of gold continued its bearish momentum to drop below 1265-area support and then 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 recently crossed decisively below the 200-day moving average, a condition that has not occurred since early 2013.
Currently, the precious metal continues to show strong downward momentum. The next major downside target resides around the 1180-area double-bottom low, which was last hit at the very end of last year.
Key upside resistance within the current bearish trend tentatively resides around the noted 1240 level.
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