Last week, we mentioned about the very critical support at 1275 as it is a 100-week moving average and uptrend line support. We wanted to see if gold could break down and closed the week under that support at 1275 to confirm our bearish case. In fact, gold hovered around that 1275 for like 2-3 days before buyers stepped in and pushed price up again. So for the last 5 weeks, gold has been unable to close the weeks under 100-week moving average. And for the daily chart, the uptrend line still provides significant base for gold.
So during last week when we saw that support at 1275 seemed to provide very good base for gold, we in fact sent out a signal on TradingView to go long on gold at 1277 and target 1286. You can see the idea again on the above 1-hour chart. Or you can simply click the following link: Inverse Head and Shoulders Pattern. If you followed us on TradingView, you would be able to make some profit. If you have not, please go to TradingView and subscribe to our channel here: GOLDTREND-NET on TRADINGVIEW
Because gold were unable to close last week under weekly support at 1275 and bounced up to 1287, we favor sideways action for gold in short term. And for daily period, daily support at 1267-1270 plus the uptrend line still provide significant base for gold. Therefore, we think short-term gold remains in a trading range between support at 1267-1270 and resistance at 1300-1303. For intermediate term, we still remain cautiously bearish on gold and look for gold to correct deeply to 1240 or even lower as long as gold trades under 1310. However, we need to see gold close several weeks under 1275 so we can be comfortable with our weekly target at 1240. The reason we stay cautious about our weekly bearish case because gold has failed several times to close its weekly under 100-week moving average, which is a sign of buyers on dip.
For the intraday chart, we see a double top formation that is forming. Please take a look on the second chart above. On the 1-hour chart, gold seems to struggle to break through resistance zone at 1288-1290. At that zone, sellers come in and try to push price down. It looks like a possible double top is forming at 1287-1288 with neckline at 1280-1281. If gold breaks down under neckline at 1280-1281, gold can go down to support zone at 1272-1274. However if gold trades above the resistance zone at 1288-1290, this double top pattern is no longer valid.