Gold price does not follow the lower dollar theme seen across the FX dashboard. Instead, it barely holds above horizontal support while capped at dynamic resistance. As such, a move below the pivotal area should trigger even more downside if the price of gold is not breaking into the upper side of the channel.
Commodities outperform at the start of the trading year. With a month-and-a-half already behind us, oil is up and settled above $60 the other day. But the move higher did not spill over to gold or silver, which are still yet to make a new high for the year.
Gold Price Technical Analysis
From a technical perspective, we may even see a head and shoulders formation on the gold price. While inside the falling channel, such a pattern usually acts as a continuation and not a reversal pattern.
Bears may want to go on the short side once the price of gold clears the pivotal area. To trade a possible bearish breakout, bears need a stop-loss at the upper half of the channel while having a take profit double than the distance to the stop-loss.
Bulls, on the other hand, remain trapped while the gold price remains inside the falling channel. Any long trade would be a contrarian, thus exposed to more risk.
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Gold Price Forecast