Gold Faces Bigger Selloff if Support Fails

  • Commodities Analysis

There’s so much uncertainty today that I think the markets are uncertain about being uncertain.

I know gold is sure trading like it.

With so much uncertainty in the world today, it’s not surprising that gold prices remain elevated. But each time it looks like a breakout is imminent, the price of gold slides back a bit.

Today’s “daily” chart of gold highlights this tug-o-war. As you can see, the price of gold is in a wide trading range (blue-shaded area). But it is trading near the top of that range.Gold Daily Chart

That said, the price has slid back a bit of late to an area that has been prior resistance (now support). This support has dual strength as the price is also approaching its up-trend line at (1).

This support test looks to be important for gold as it tries to remain within reach of a breakout. If support fails, it could face a bigger decline.

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