Price of Gold - Bias is now to the down side

Although I’ve been expecting gold to move higher, the mass of participants in the gold market have decided collectively to move sideways for the time being, and perhaps downwards for another test of the low at 736.

A break below S1 (on the chart) will target S2 and if that is broken, then 736.

Resistance, around 925, if broken, will target the declining trend line and then the July high of 988.50.

The immediate next move for gold is debatable, however bias is now to the down side – meaning S1 is more likely to be broken to the downside before R1 is penetrated to the upside.

TECHNICALS


Gold chart as at 16 October 2008 using NextVIEW Advisor

The strong down move from October 10th may have follow-through momentum, continuing the downward slide.
RSI – clearly in bearish territory, and sloping down.

R1 – resistance at 925.
S1- nearby support at 820.50
S2 – 777.
S3 – 736.

Article and Commentary by Don Schellenberg. Mr Don Schellenberg is Senior Market Strategist of the NextView Group. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.