On the daily Gold chart ( not shown) all we see is weakness and bears being in full control and commitment. Frankly, no one knows where this bearish down move may stop. All we can do as chart lovers is to look at our weekly chart now and note the next level of support. I did that on the monthly few posts earlier but lets look at it in the weekly time frame now. Whetehr or not this support holds is another matter off course. But a reaction of some sort is expected.At least to temporarily halt this bearish move. The zone that I am talking about is US$1200. On the way up on the other hand is the first resistance in the zone of US$1300. It may be reasonable to expect some trading range formation between support of US$1200 and resistance of US$1300. Will it ?
As of this writing around 18:00 hours Melbourne time, Gold is trading around US$1218 which falls into the zone of support. Lets see how things may unfold over the next few trading sessions. Will the US$1200 support hold ? Or will the power of the bear punch through this level as well ?
Despite the very bearish candle of last week, OBV at the bottom window is still flat. This divergence may suggest a potential beginning of the end for this down move which requires confirmation by the price action. Even if we see a halt to this down move at current levels, we may get stuck in a US$100 trading range for a while.
Commodity bull run without the precious metal ? May be, but unlikely IMHO.
Chart is courtesy of StockCharts.com
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