Gold retreats from key resistance level
James Chen January 21, 2014 8:59 PM
<p>January 21, 2014 – Gold (daily chart) has retreated from key resistance around the 1265 area after hitting a high of 1262 earlier in the […]</p>
January 21, 2014 – Gold (daily chart) has retreated from key resistance around the 1265 area after hitting a high of 1262 earlier in the week.
This 1265 resistance area has served as strong support and resistance since mid-2013. This level also currently coincides with a major downtrend line extending back to the August high of around 1433.
Gold’s rise to this strong resistance occurred after the precious metal retested June’s 1180 multi-year low on the last day of 2013 to establish a double-bottom and more than a three-year low at 1178.
Having just turned down from resistance, gold is exhibiting signs of a potential resumption of the bearish stance that has been in place since the October 2012 1800-area high.
The current bearish environment is reinforced by the 50-day moving average – being well below the 200-day moving average, both of which are pointing decisively to the downside.
Moving forward, a continued bearish environment should potentially prevail for gold. Any further breakdown below the 1178 low would confirm a continuation of the sustained bearish trend that has been in place since the noted October 2012 high.
That breakdown could then potentially position gold to target further downside around the 1000 psychological support level.
Upside resistance within the current bearish environment continues to reside around the major 1265 resistance area.
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