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More downside expected: gold price technical analysis

By Nathan Batchelor

Gold price technical analysis shows that gold could fall towards the $1,490 level before recovering. The lower time frames show a bearish head and shoulders pattern.

 gold price technical analysis

Gold price technical analysisshows that a continuation of the recent reversal from the $1,600 area is highly probable this week.

Bearish price patterns on the lower time frames suggest that gold could soon start to test towards the $1,500 level and possibly even lower.

Gold medium-term price trend

Gold technical analysisover the medium-term shows that the yellow metal is still technically bullish while trading above the $1,435 level.

With this in mind, traders are still expected to buy dips as the prevailing price trend is overwhelmingly bullish.

gold price technical analysis

The issue that bulls currently face is that positive risk sentiment dynamics underway in the broader market are likely to see gold prices forced lower, until risk-off market sentiment returns.

Positive data from the United States and a ratcheting down of tensions between Iran and the US are currently bearish for gold prices.

Dip-buyers may look to enter the bullish trend on an extended technical pullback towards the $1,490 to $1,475 technical area if the reversal from the $1,600 level continues to gather pace.

Gold short-term price trend

Gold technical analysis over the short-term shows that the metal will only turn bearish if price trades below the $1,510 level.

The main area of focus for traders this week will be on the $1,555 technical level, as it represents the neckline of a large head and shoulders pattern on the lower time frames.

gold price technical analysis

The bearish pattern holds a substantial downside projection that would take the price of gold towards the $1,490 level.

Gold has so far found interim technical support from the $1,530 level, and moved back towards the neckline of the bearish pattern.

Watch out for a bearish reversal from the $1,555 level. At this stage, only a clean break above the $1,580 level would convince traders that bulls are likely to test the $1,600 level again.

Gold technical summary

Gold technical analysisshows that the yellow metal could continue to drift lower this week. The $1,555 level remains the key area for traders to watch for weakness or strength

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