Gold lower to start the day as sellers look to keep price below $1,900

Technical Analysis

Author: Justin Low | gold

Gold is down 0.6% to $1,889 ahead of European trading

Gold D1 23-09
Precious metals aren't faring too well to start the day with silver down by 3% and gold is also down by 0.6%, falling below $1,900 as sellers look to make a play.

The recent wedge consolidation pattern appears to have encountered a breakdown at the start of the week, but the $1,900 kept buyers in the game on Monday.

However, that level is now being challenged and a firm break/close below that today could set off further downside momentum in gold towards the 12 August low @ $1,863.15.

For the most part, the push lower in gold this week owes to the dollar's outperformance and this is another spot that is keeping dollar bulls in the driver's seat.

With EUR/USD breaking below daily support @ 1.1754 and now contesting a firm break below 1.1700, the short dollar squeeze could yet carry on and that will also present a headwind for gold buyers in the coming sessions.

In the long-term, there are good reasons to be bullish on gold but there's a time and place to pick your battles. The technical pattern above certainly doesn't paint a pretty picture for now but I would expect dip buyers closer to the 12 August low and perhaps the 100-day MA (red line) @ $1,842.70 if anything else.

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