- Gold has fallen lower today after last week’s strong rise
- Price stopped just short of the previous 2017 highs
- Possible triple top being formed. Reversal signals here could be attractive for shorts
- However, a break above 1295 could see a breakout rally higher
The price of Gold has dropped this morning as the heightened geopolitical tensions that triggered last week’s surge higher have eased somewhat. There’s not really been any peaceful developments that suggest a backing down from either the US or North Korea, but now the dust has settled a sense of calm has returned to the markets for now. Stock indices in Europe have seen a strong bounce higher and the Wall Street open could lead to the US following suit.
European indices are enjoying a strong bounce this morning with the DE30 gaining more than 100 points. Source: xtb.com
This improvement in risk sentiment saw Gold sell-off throughout the European morning, although price has just popped higher in recent trade. The precious metal currently trades not far from its 2017 peak and a strong reversal signal here could provide an attractive opportunity for shorts. A possible triple top around the 1292-1295 region could be forming and if we see a rejection here then the gains seen since early July when price traded down to 1205 look vulnerable.
There could be a triple top forming in Gold in the 1292-1295 region. A reversal signal here could be of interest to traders looking to short. Source: xStation
Alternatively if the market fails to halt the rally soon then there could be a major breakout. A clean move and close above 1295 would take out the previous highs and pave the way for a sustained breakout rally. A longer term chart (weekly) could cause shorts to become concerned as a falling trendline from the highs seen back in 2011 was broken above last week. Should bulls manage to push the market above the 1295 level then 1335 and 1386 could swiftly follow in the not too distant future.
On longer term charts Gold appears to have broken out of a falling trendline form the 2011 highs. Source: xStation