GOLD unable to break through key resistance level
Gold (GOLD) Technical Analysis Report for Sep 15, 2020 | by Techniquant Editorial Team
GOLD ended Tuesday at 1961.9 losing $3.2 (-0.16%). Trading $16.2 higher after the open, the contract was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 11th, GOLD actually gained 0.87% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GOLD as at Sep 15, 2020):
Tuesday's trading range has been $26.8 (1.36%), that's below the last trading month's daily average range of $38.1. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for GOLD.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns.
Unable to break through the key technical resistance level at 1970.3 (R1), the market closed below it after spiking up to 1982.4 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
Though GOLD is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 1944.0 where further sell stops might get triggered. As prices are trading close to September's high at 2001.2, upside momentum could speed up should the contract mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Gold. Out of 247 times, GOLD closed higher 57.09% 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 52.23% with an average market move of -0.01%.
With four out of the other seven Commodity Markets closing lower today, the ones that stand out on the negative side are WHEAT losing -1.6% and CORN closing -0.75% lower. On the flipside the best performers have been CRUDE closing 3.01% higher and SUGAR gaining 2.58%. Read more