GOLD PRICES RUN INTO RESISTANCE

The bullish trend in Gold has finally found some resistance that could hold buyers at bay, putting at least a pause on what’s become an aggressively strong month of price action in the yellow metal. Gold prices spent much of the prior three months in consolidation; highlighting breakout potential in early-May and again later in the month. That allowed for an aggressive breakout to take place that saw Gold prices surge up to fresh six-year-highs, setting a fresh high watermark during yesterday’s trade just shy of the 1440 handle.

Resistance is playing in off of a longer-term zone that connects the 50% marker of the 2012-2015 major move to the prior six-year-high at 1433.85.

GOLD WEEKLY PRICE CHART

Chart prepared by James Stanley

Going down to the daily chart highlights bearish reversal potential. Gold prices put in a day of indecision during yesterday’s trade after that fresh-high came into play. With sellers making a run as follow-up to yesterday’s indecision, the potential is there for the build of an evening star pattern. Such a formation will often be approached with the aim of a bearish reversal, particularly when a prior top-side trend had moved into overbought status. That happened weeks ago in Gold but buyers continued to push; making this an item of interest for traders on either side of Gold prices. For those looking at short-side stances, completion of this formation may open the door for a larger reversal. For those continuing to employ bullish strategies, letting this pullback play-out until support might come into play could re-open the door for bullish continuation strategies.

GOLD PRICE DAILY CHART

Chart prepared by James Stanley

GOLD PRICE NEXT SUPPORT POTENTIAL

There are a variety of levels underneath current prices that can function as either targets for short-side approaches or support potential for those looking to get long. Given how stretched that prior move had become, finding recent historical levels of note could be of a challenge. But, the 2014 swing-high at 1392 could function as such, and a bit lower at 1375.15 is the 2016 swing-high, and this is confluent with the 38.2% Fibonacci retracement of the most recent advance.

Below that, another confluent zone of interest shows around the 1350-level, as there’s both the 50% marker of the recent trend to go along with a prior swing-high that showed around the bearish trend-line projection of the longer-term symmetrical wedge pattern. If price action poses a break below that zone in short-order, then something in the backdrop has likely shifted and the bullish approach will likely need to come into question.

For bulls that want to remain aggressive – watch the 1400 level today, as this is the 23.6% retracement of that recent major move; and if buyers can hold the line of support here, the bullish theme remains in full view.

GOLD PRICE FOUR-HOUR CHART

Chart prepared by James Stanley