Gold On The Move – New 2013 Lows Reached

Weekly Chart

Gold bears are on the move again. Price has successfully broken below the 1,265 ceiling found on Jun 2010, and is now aiming towards the lower end of the May-Jun 2010 consolidation close to 1,150. The sharp decline appears to be unprovoked, with price declining mostly due to sentiment and speculative movements. With that in mind, any strong bearish follow through beyond 1,150 may be difficult, and it is possible that some form of bullish correction may occur, similar to what was observed back in late April and also late May. Stochastic echoes the same sentiment, with both Signal and Stoch line within Oversold region. This does not mean that price will not be able to push lower, but that extended losses may be difficult without any fundamental impetus fueling the drop.

All in all, current bearish sentiment is a force to reckon with considering that USD strength has not really strengthened that much on an intraday basis. Should USD begin to strengthen further, we could see further acceleration lower, and perhaps be the extra push bears need to break 1,150 should fundamental reasons proved wanting by then.

More Links:
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EUR/USD Technicals – 1.315 and 38.2% Fib Remains

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