GOLD runs into sellers around 1563.1 for the third day in a row
Gold (GOLD) Technical Analysis Report for Jan 13, 2020 | by Techniquant Editorial Team
GOLD finished Monday at 1548.3 tanking $14.9 (-0.95%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GOLD as at Jan 13, 2020):
Monday's trading range has been $16.1 (1.03%), that's slightly below the last trading month's daily average range of $16.3. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for GOLD. Prices continued to consolidate within a tight trading range between 1541.0 and 1564.1 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 1550.8 (now R1), which is likely to act as resistance going forward. The contract ran into sellers again today around 1563.1 for the third trading day in a row after having found sellers at 1564.1 in the previous session and at 1562.4 two days ago. The last time this happened on December 18, 2019, GOLD actually gained 0.22% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 1564.1 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 1541.0 where further sell stops might get triggered. With prices trading close to this year's low at 1519.7, downside momentum could accelerate should the market break out to new lows for the year.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Gold. Out of 201 times, GOLD closed higher 56.72% of the time on the next trading day after the market condition occurred.
With five out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are COFFEE losing -2.82% and CRUDE closing -1.74% lower. On the flipside the best performers have been CORN closing 0.78% higher and SUGAR gaining 0.64%. Read more