GOLD continues to trade its bearish momentum for the fourth consecutive day now. In fact, the yellow metal fell around -0.44% to trade at around $1,278 today, helping us secure another winning signal.

Reasons Behind Bearish Bias

A day before, China spoke about introducing fiscal stimulus to accommodate its economy. Although it’s a sign to increase money supply, it also confirms the weakness in the Chinese economy. Logically, the economy fighting a slower growth won’t go for buying gold.

Secondly, gold was stuck in a narrow range of $1,294 – $1,287 for a couple of weeks. The range got violated on the lower side and since then the gold is keeping its a bearish trend. Even on the weekly timeframe, gold has formed a bearish engulfing pattern followed by a doji pattern, signaling a strong selling intention of traders.

Support Resistance
1279.94 1288.01
1274.69 1290.83
1266.62 1298.9
Key Trading Level: 1282.76

That being said, consider taking sell positions below $1,282 with a target of $1,277. The violation of $1,277 can drive further selling until $1,265.

Good luck!