SPDR Gold Trust (GLD)

[DiscoverGold]

Gold Bearish Bias Persists as Consolidation Persists
By: Bruce Powers | May 8, 2024

• Gold's price movements suggest a bearish bias, with key support levels and potential targets indicating a possible continuation of the current downtrend.

Gold continues to go nowhere as it further trades within a seven day price range on Wednesday. The stage is set for a continuation lower. A bearish bias remains given the breakdown from a bear flag last week. Gold also continued to fall away from the 20-Day MA, which was tested as resistance all this week. April 23 was the first decline below the 20-Day line since the rally began on February 29 with a breakout from a symmetrical triangle bottom pattern.



50-Day Moving Average is Key Lower Target

A key lower potential support level is around the 50-Day MA, currently at 2,251. It is close to converging with a Fibonacci confluence zone from 2,261 to 2,255. Together, they create a price range from 2,261 to 2,255. This will be a decision zone where there may be signs of support followed by a bullish reversal. However, there are lower price targets in the case that gold continues to retrace the previous advance.

Lower Targets if 50-Day Line Fails to Hold

The initial target from the bear flag pattern is at 2,238, while a falling ABCD pattern targets 2,212. That lower price level is given added significance by the 50% retracement at 2,208. It is important to be aware that the low support level from April was at 2,228. This means that if gold falls below 2,228 on the way to the lower price zone, it will have triggered a bearish move on the monthly chart. That would be a sign of weakness that could make it more difficult for the uptrend to recover without further consolidation or retracement.

Recognition of Rising Trend Channels

How down might gold go? There are two rising trend channels on the chart of gold. A larger one and smaller one. Gold remains within the boundaries of the smaller channel, that is within the larger channel. Last month there was a false breakout of both trend channels, leading to the current retracement. Typically, once a side of the channel has been tested as resistance in this case, the potential for gold to fall to test the lower channel line becomes possible. Of course, that would occur first on the smaller channel. But the price represented by the line will depend on when it is approached given its downward slope.

Read Full Story »»»

DiscoverGold