Stocks Dominate Headlines: The main story on Monday (12/22) was the record high at close set by Dow Jones Industrial Average (DJIA) and the Standard and Poor’s 500 Index (S&P500).
The DJIA gained 154.64 points, or 0.9 percent, and closed at 17,959.44, beating the previous record close at 17,958.79 on Dec. 5. Meanwhile ,the SP500 closed 7.89 points higher, or 0.4 percent, to 2,078.54, surpassing the previous record close of 2,075.37 also set on Dec. 5. There was a notable surge in the tech sector.
Gold Falls: So what happened to gold? After hanging around 1200, gold fell during the US session, threatened 1170 and is trading around 1177 as we begin the 12/23 session.
Reviving the Bearish Mode: As we can see in the 4H chart, this dip took away any bullish bias when price was trading above or at least within the cluster of the 200-, 100-, and 50-period SMAs. Momentum is also no longer bullish, and even slightly bearish as the 4H RSI brushes 30.
Around 1170, we can see a projected resistance/support line that can in this case provide some support. Now, if gold holds below 1200, it is neutral-bearish, with emphasis on the bearish component because the prevailing trend before November was bearish.
If we just look at Nov-Dec price action, it has been sideways-bullish. But this is in the context of a larger downtrend that is still intact, as we can see in the daily chart.
Bearish Continuation: After today’s price action, the daily chart is signaling a bearish continuation. Price is back below the 200-, 100-, and 50-day SMAs, which are sloping down and are in bearish alignment. The daily RSI managed to hold below 60, which shows maintenance of the prevailing bearish momentum. Price has retreated from 1240, respecting the 100-day SMA and a falling trendline. It made a head and shoulders pattern, and has broken below the neckline today.
With gold holding below 1200, it has a bearish continuation outlook at least to test the 1130-1150 lows on the year.
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