MarketsToday writes: About six weeks ago XAU/USD (Gold) broke down from a long-term bearish descending triangle pattern, as it dropped below, and subsequently closed below 1,180.20 on both a daily and weekly basis. The price objective from the triangle pattern is approximately 926.65. So far there has been little downside follow through as support was found 1,132.08 shortly after the bearish breakout, and Gold has been rebounding back into resistance of the triangle pattern since.

Given that the larger price pattern continues to be bearish, further downside remains the likely scenario, unless Gold can get above and stay above the most recent swing high of 1,255.25. At that point further upside becomes more likely as the prior peak of the short-term downtrend price structure is exceeded to the upside.

The second enclosed daily chart looks at the AB=CD or measured move pattern that is developing in Gold as it has risen off the 1,132.08 low from six weeks ago. For over a week Gold’s ascent has been stalled around the 55-day exponential moving average (ema) and short-term downtrend line.

If Gold can continue higher from here the next area to watch for resistance is from around 1,228.89 (78.6% Fibonacci retracement of most recent down swing), to 1,232.4 (completion of AB=CD move). At that point the risk to reward for a short entry is best. Alternatively, wait for a decisive rally above 1,255.25 for a long entry.(www.marketstoday.net)

About MarketsToday.net: MarketsToday.net® is an online financial portal covering the Middle East stock markets, plus spot Forex, oil, and precious metals, published in both Arabic and English. It is designed to help keep investors and traders up-to-date with the latest news, quotes, performance trends, and market developments in the Middle East stock markets.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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