Greetings traders,
Looking at the 4H chart above, we can see that Gold has broken out of a trendline and is now going to the downside. It has retraced all the way to 38.2% retracement which means this commodity could drop really quickly in the next couple 4H candlesticks.
If we step back into the Daily timeframe, we can clearly see why Gold has dropped and why it could possibly keep dropping for a while.
Price has pushed three times into this channel before hitting that weekly zone of 1350. At the 1350 level, it formed a bearish pin bar, which is a strong indication that price will reverse at this point, and given that this a weekly level, this could be a strong rejection.
Gold could possibly break that channel it’s currently in and go down to the -61.8% level which is 1305, which lines up with our Daily support level and near the Monthly zone.
Overall, Gold is looking like a sell at the moment and in the future.