After a tradable breakout above $1275, Gold prices ran back up to $1390 before retreating. But that retreat turned into a quick tumble, as Gold slipped over $110 in two weeks to retest the $1275 level… again… and again. This level continues to bear importance for gold traders. As it stands, the near-term price action shows gold prices coiling in wait for its next directional price move.
And what happens over the coming days will likely determine the next tradable move.
In the charts below, you can see the action that I detailed above, as well as the tight wedge pattern that has formed over the past 5 weeks. Considering the swift move lower in March (and again in April), the expectation would be for Gold to continue lower through the bottom of the wedge support.
However, with the current uncertain price action in the market place and geo-political risks, it’s probably a good idea to wait for confirmation (in any direction). On the upside, the descending trend line (in orange) highlights near-term resistance that bulls will need to conquer. A move above this resistance would serve as a “first step” in alleviating some of the short-term coiling pressure after the downdraft.
On a macro level, Gold is still working its way through the bottoming process and this will likely play out for some time yet.
For a more thorough look at the levels, read: 5 Charts For Gold Investors: Follow The Yellow Brick Road.
Gold Spot Prices – Daily Chart
Gold Spot Prices – Daily Chart “Zoom”
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.