Gold heading for lower lows?

<p>Gold (daily chart) has shown marked weakness since its $1433 high in late August. From that high, the precious metal dropped down to a low […]</p>

Gold (daily chart) has shown marked weakness since its $1433 high in late August. From that high, the precious metal dropped down to a low of $1251 in mid-October before pulling back up to $1361 in late October, which was the 61.8% Fibonacci retracement of the prior bearish leg.

Since that upside pullback, gold has fallen sharply for the past month on its way towards its major downside objective – the key $1180 level, which was the multi-year low that was last established in late June. A breakdown below $1180 would confirm a continuation of the sustained bearish trend in gold that has been in place since the October 2012 high near $1800. A continued bearish environment should prevail for the precious metal, as the price of gold is well below its 50-day moving average which is, in turn, well below the 200-day moving average. Any strong breakdown below the noted $1180 low could potentially begin to target further downside around the $1000 psychological support level.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (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.

For further details see our full non-independent research disclaimer and quarterly summary.