Gold price extended its decline versus the US dollar below $1280 as forecasted in the last analysis. More losses to follow going forward?
Gold Price Weekly Forecast – More Losses On The Cards?
· Gold price was under pressure against the US Dollar, as it moved below $1260.
· There are a couple of bearish trend lines formed on the 4-hours chart of XAU/USD, preventing gains near $1262-65.
· There is a chance of a minor upside move towards $1268, but gains may not last long.
Gold Price Technical Analysis
In the last weekly analysis, I highlighted that there is a chance of more losses in Gold price versus the US Dollar since there was a break below a triangle pattern on the daily chart. The price did move down, and traded as low as $1241.
Is it currently correcting higher, but facing resistance near $1260, which is coinciding with a bearish trend line on the 4-hours chart of XAU/USD.
Moreover, the 23.6% Fib retracement level of the last drop from the $1342 high to $1421 low is also acting as a resistance. There is another trend line on the upside near $1265, waiting to act as a barrier for the bulls.
Trade Idea – If the price moves higher, then one may consider selling near the highlighted trend lines with a stop above it.
Today, there was a major release in China, as the Consumer Price Index was reported by the National Bureau of Statistics of China. The market was positioned for a 0.3% rise in Sep 2016, compared with Aug 2016.
However, the result was positive with a rise of 0.7%. The Chinese yearly change in the CPI was 1.9%, which was better compared with the forecast of 1.6% in Sep 2016, compared with the same month a year ago.
The Chinese PPI was also reported, which posted a rise of 0.1% in Sep 2016, compared with the same month a year ago. No doubt, the figures were positive, which may push gold price higher towards $1260-65. However, the upside may be limited considering the hurdles on the high side. So, one should stay away from buying in the short term.