Gold Sinks Below $1,330 as The Market Recovers Risk Appetite!
On Monday, gold prices continue to trade lower on the back of stronger dollar and a weakening demand for haven assets. I just spotted a really cool Gartley pattern which can give us a potential trade today. Are you ready for it?
Top 3 Reasons Behind a Bearish Gold
One of the reasons behind a sharp selling in gold is a stronger dollar. The greenback soared to the 90 level after being restrained in the 89 range in the previous week.
Secondly, the gold fell after yields on 10-year US Treasuries inched up to 2.96%. It’s the highest level since January 2014. In the forex market, investors have many options to invest in and they prefer to keep their investments in the high premium paying securities. That’s why we saw a drop in gold.
Thirdly, the geopolitical developments kept the precious metal supported, but the talks between China and the US eased the markets. Additionally, the North Korea’s leader Kim Jong Un said he might be open to putting nuclear tests on hold. Hence, the demand for safe-haven assets dented.
Gold – XAU/USD Gartley Pattern
On the 4 – hour chart, the gold is facing a solid support above $1,333, the double bottom level. We can see, it’s heavily oversold and should retrace back up to $1,336 (23.6% Fibo level) and $1,340 (38.2% Fibo level). But in case gold violates the $1,333 support, the next target can be $1,324 and that’s where gold completes its bullish Gartley pattern.
Gold – 240 Min Chart – Gartley Pattern
Gold – XAU/USD – Trading Idea
I will be looking to stay bearish below $1,336 and $1,340 until receives a solid reason for a bullish reversal. Next target is likely to be $1,324. Good luck!