Gold has moved lower once more today with price trading down to its lowest level in over a month. Whilst the size of the decline is minimal it does represent another lower low and with the market currently testing a long term trendline from the lows seen last December, there is some suggestion the uptrend is under threat.
The market is currently testing a rising trendline from last December’s low at 1124
Whilst trendlines are possibly the simplest trend identification technique several other can be used. A 200 day SMA can be used a trend identification tool, with an uptrend being recognised when price is above the 200 day SMA and a downtrend signalled when it is below. The 200 day SMA is currently at 1236. Also not that the direction the 200 day SMA points can be seen as indicative of a trend – it is currently pointing lower.
The market is now approaching the 200 day SMA which continues to point lower
Next lets look at the Ichimoku cloud on a daily timeframe. Price is now testing the cloud and a break below here could be seen as signalling the end to the uptrend seen over the past 6 months. To be confirmed not only would price need to break below the cloud but also the accompanying lines.
Gold is testing the Ichimoku cloud on D1. A break and close below here, as well as the accompanying lines falling below the cloud could be seen to signal a change in trend
It should be made clear that for the time being Gold remains in an uptrend according to all 3 trend identification techniques however the current declines in price mean that it wouldn’t take much more downside for this to change. It may be wise watching this market closely in the coming days to see if there are further signals of the uptrend ending or whether the bulls can defend this area and push prices back higher.