By analyzing the daily technical chart we can see that gold has made a high of $1452.80 level and after making that level bulls were struggling and it could not sustain at that level, eventually it slipped to $1420 level which created the bearish signal at an initial level. Yesterday’s bearish move was the confirmation of trend reversal due to interest rate cut by FOMC. Well it was already expected by the most of analyst that this time FOMC will go for the interest rate cut and we may see a bearish impact on yellow metal.
The bias has been shift from bullish to bearish now and we will keep our bias bearish on the gold as long as $1450 level remains intact and there are high chances that we may $1380 level in near term. Yesterday’s bearish marabuzo candlestick is full of bearish sentiments which is generating bearish signal and suggesting us to stay at downside with intraday stop loss of $1435 level.
Well we will get further confirmation below $1400 level, a daily closing below the $1400 level will open the way towards the $1370 and $1350 level. We may proclaim that gold has topped out as a dark cloud candlestick has been formed on the chart followed by other bearish candlesticks. We have seen strong bearish sentiments where bears were dominating the bulls. On contrary, we may see strong buying above $1450 level as it’s a strong resistance level. A valid breakout of $1450 level will open the way towards the $1500 and $1550 level but there must be a daily closing above $1450 level will only confirm the further bullish sentiments.
In our previous report we have written to buy it from $1380 level for the target of $1450 level which has been achieved easily, we are happy to say that our readers must have made profit from this move and last week the first phase of bulls run completed successfully.
A bearish crossover on the MACD indicator is favoring the bearish sentiments. RSI is also providing us bearish signal from positive territory. The RSI has arrived into overbought territory so some correction can’t be ruled out. The $1450 level is key resistance level followed by $1480 whereas $1400 is key support level followed by $1380 level. Odds are in favor of bears and daily to weekly bias remains bearish on the yellow metal.
Trade idea :- One can go for short the gold at current levels i.e. 1408-10 target is $1390 and $1370 with tight stop loss of $1435 level.