GOLD breaks below key technical support level


Gold (GOLD) Technical Analysis Report for Aug 19, 2019 | by Techniquant Editorial Team

Highlights

GOLD breaks below key technical support level
GOLD dominated by bears dragging the market lower throughout the day
GOLD closes lower for the 2nd day in a row
GOLD breaks below Friday's low

Overview

Moving lower for the 2nd day in a row, GOLD ended Monday at 1505.7 losing $17.9 (-1.17%) on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 1513.9, the market confirmed its breakout through the prior session low after trading up to $10.6 below it intraday.

Daily Candlestick Chart (GOLD as at Aug 19, 2019):

Daily technical analysis candlestick chart for Gold (GOLD) as at Aug 19, 2019

Monday's trading range has been $20.3 (1.33%), that's slightly below the last trading month's daily average range of $24.4. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for GOLD.

One bearish candlestick pattern matches today's price action, the Black Candle.

Prices are trading close to the key technical support level at 1490.7 (S1). Prices broke below the key technical support level at 1522.7 (now R1), which is likely to act as resistance going forward. The last time this happened on July 31st, GOLD actually gained 2.20% on the following trading day.

The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.

Selling could speed up should prices move below the close-by swing low at 1490.7 where further sell stops might get activated.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Gold. Out of 257 times, GOLD closed higher 56.42% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 53.70% with an average market move of 0.23%.

With five out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are CORN losing -1.64% and SUGAR closing -1.5% lower. On the flipside the best performer has been CRUDE closing 2.3% higher. Read more


Market Conditions for GOLD as at Aug 19, 2019

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