Gold got whacked on Thursday and is presently testing the $1,280 level once again. The bullions are vulnerable and show no indications of reversing the ugly trade anytime soon. The safe haven gold rose over the $1,300 level on the starting of this week due to the escalating trade conflict between the U.S. and China. However, gold prices started falling below 1,300 due to a strong recovery in the U.S. stock market over boosted risk appetite of investors.
The prevailing trend in metals is down, and nothing will change that until the pattern shifts. As we have shared for weeks, gold is a sell at resistance and has a chance to break down entirely. For now, gold is trading either side of the 61.8% Fibonacci retracement level at $1,287/oz.
Overall, the market still shows a bias to higher prices with gold trading above all three moving averages and now out of the overbought territory.
On the 4 hour chart, it has faced solid support around 1,283, which may offer a potential bullish reversal for a while. However, bearish power stays strong. The 20, 25 and 50 periods EMA are likely to keep gold bearish under 1,292.
The bearish breakout of 1,283 can extend bearish rally towards 1,279 or even below it until 1,274.
Support and Resistance
Key Trading Level: 1289.76
Gold – Trade Tips
We may see a slight bullish retracement, but the more significant trend remains bearish. So, consider staying bearish below 1,288 resistance to target 1,279 and 1,277 today. All the best!