Gold Forms a Bullish Reversing Pattern on the Daily Chart, as Sentiment Sours Again
[[GOLD]] was extremely bullish during summer, as the sentiment turned negative in financial markets due to a deteriorating global economy and an escalating trade war. But, the sentiment improved in September and Gold lost some appeal, retracing lower. In October, the price action was mostly sideways, with Gold trading in a range.
This month though, the bearish momentum resumed again for Gold and we saw a decent decline last week and on Monday morning. Gold broke the 200 SMA which was acting as support on the H4 chart and fell to $1,445, which is a long term support and resistance zone.
But, the decline stopped at that level and on Tuesday afternoon we saw Gold reverse higher, as the sentiment turned negative, following Donald Trump’s speech on trade. He didn’t sound too upbeat about it, which hurt the sentiment and geopolitical tensions in the Far East added further fuel to that. So, Gold formed a doji candlestick that day, which is a bullish reversing signal after the decline.
Yesterday’s candlestick closed pretty bullish as well and the stochastic indicator became oversold and is turning up now. So, a bullish reversing chart setup has formed in Gold. Now let’s see if buyers will push to the 100 SMA (green) on the daily chart. If they do, we will consider going short from there, in case a bearish reversing chart setup forms as well.
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