Gold price declined this week against the US Dollar, and it looks like the downsides are here to stay since the price is now below the $1200 support.
Gold Price Weekly Analysis – Downtrend Is Here To Stay
· There was an increase in the bearish pressure on Gold price against the US Dollar, taking the price below $1200.
· Last week’s bearish trend line on the 4-hours chart of XAUUSD played well in acting as a resistance for the price.
· The US Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics this week posted an increase from the last reading of 53.4 to 53.9 in Nov 2016.
Gold Price Technical Analysis
Gold faced a lot sellers recently against the US dollar and traded down to break a couple of important support levels like $1210 and $1200. This past week, I highlighted a bearish trend line on the 4-hours chart of XAUUSD. It played well in acting as a resistance and pushed the price down.
During the downside move, the price also broke a support trend line on the same chart at $1190. A new weekly low was formed at $1170, and the price is currently consolidating losses above it.
There is a chance of a minor bounce back in gold price, but it could face sellers on the upside. An initial resistance is around the $1190 level. The next important one is around the same bearish trend line, coinciding with the 23.6% Fib retracement level of the last drop from the $1137 high to $1170 low.
Trade Idea – If you are looking to enter a sell trade, then consider it near the highlighted trend line resistance with a stop above it.
This week in the US, the Manufacturing Purchasing Managers Index (PMI) was released by the Markit Economics. The market was aligned for no change in the PMI from 53.4 in Nov 2016 (preliminary).
However, the result was better, as there was a rise to 53.9. So, it boosted the US Dollar, and helped it in gaining traction. There were a few other releases as well, but none was able to spark a correction in the USD.
Overall, it looks like gold price may remain under a bearish pressure, and could continue to trade lower may be below $1170.