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Safe Haven Appeal Fades – Bearish Gold Awaits Buyers

Today, we can bet our bottom dollar on the Gold seeing as it's moving exactly as we predicted. There has been little indication of strong selling pressure, and the Gold prices have fallen to 2-week lows. Things don't end here, the market is still trading with the bearish Gold sentiment.  

As we discussed in our earlier update, What Happens If Gold Breaks 61.8% Fibonacci Level? the Gold broke below $1265/66 support level and moved towards $1261. However, I was expecting a drop until $1258. Looking at the fundamental side, we don't have any important news that may cause massive fluctuations in the Gold prices.

Gold - 4 Hours ChartGold – 4 Hours Chart

 

Technical Outlook – Intraday

On the technical side, the test bars that are well above the major support level of $1261 hint that sellers are getting exhausted and that we may see buyers entering the markets. However, in the hourly timeframe, the RSI is still holding in the selling zone.

In my opinion, the oversold Gold needs to complete the $38.2 ($1267.28) and 50% ($1269.20) Fibonacci retracements before further selling.

Forex Trading Signal

Taking the technical analysis into account, I have entered a buy position above $1264.70 with a stop loss below $1260.4 and a take profit at $1268. At the time of writing, the Gold trade has already entered into profit.  As usual, we need to apply strict money management strategy to avoid sudden reversals.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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