Gold prices fell from a high last week of 1345 to about 1294 today as the 7/15 global session wraps up. This equates to a 3.7% slide in just 2 days, quite substantial, but not close to the slide we saw in March from 1388.50 to 1276.50, an 8% slide that lasted 2 weeks.
Yellen: Today, traders bid up the USD as Janet Yellen answered questions in front of congressional members regarding monetary policy. There will be a second an final session tomorrow (7/16). The broad USD strength that followed today’s event risk pulled XAU/USD, gold priced in the US Dollar, down below 1300.
Gold (XAU/USD) 4H Chart 7/15
(click to enlarge)
– In the daily chart, you can see that this week’s bearish price action is unmatched this year except for the dip in mid-March, of over 110.00 points. So far gold has slid half of that.
– You can also see that there is room to fall until a cluster of support factors around 1270. Here we see
1) support/resistance pivots established in 2014.
2) A rising trendline connecting the Dec. 30 low of 1182.35 and the June low of 1240.50.
3) A falling trendline that was broken, and could be treated as support.
In the near-term, the bearish swings might start to look oversold. However, if the market is bearish, it should hold below 1320 on a subsequent pullback.
Another clue in the 4H chart that can confirm further bearish outlook is if the RSI pops up but holds below 60. If price slows around 1320 and the RSI stalls at 60, look for a bearish attempt to continue this week’s dramatic slide.
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