Gold sinks back to the January high

Technical Analysis

Author: Adam Button | gold

Gold down $11

Gold down $11
Gold is in the midst of its worst day since November 9 as the momentum from the months-long rally fades.

The January high was $1326 and that's acting as support now with prices today down $11 to $1327.

I warned about gold declines yesterday:
I believe we've entered the final stages of the gold rally, at least in the short term. It's rallied more than 12% in a fairly short timeframe and the good news from the Fed is already in. There could be another leg higher on a flare up in trade but there isn't currently a catalyst to break $1365 and the technicals are tough. From a risk-reward perspective, I see a good argument to move to the sidelines now or above $1350.
The I pretty much top-ticked the move at $1344 and sold it myself but the next move is less clear. The drop has happened more quickly than anticipated and that's concerning. Still, there's support here and the key for the next move is whether that holds.
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