Safe Haven Appeal Fades – Bearish Gold Awaits Buyers
Arslan Butt • 1 min read
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 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.