For large part this year (and last), Gold/USD has been positively correlated with Risk Appetite, hence it is peculiar that Gold/USD was not able to push any higher despite stronger US equities for the past 3 trading days.
To better understand the current Gold trend, lets price Gold in other currencies and see how they are performing – AUD and CAD are chosen due to their Commodities backed nature, while EUR and YEN are chosen due to their global traded volume.
When Gold is priced in CAD, we can see that Gold prices has been moving lower but managed to stay afloat of 1,700 support/resistance.
Consistent decline currently hitting previous resistance of 1,680. No evidence of rebound yet.
Prices broke below rising rising channel and 1,330 could act as soft support, though stronger support could be found closer to 1,300 where the peaks in March and June reached.
M-Shaped pattern (double top) similar to Gold/USD,Â with potential support around 135,000. Price facing resistance around 141,000.
Gold priced in USD could potentially be supported along 1,720, with another support potentially seen around 1,740. The failure to push above peak in March will weigh on price direction.
It seems that the decline in Gold is visible across various currencies and not just the USD. What is of interest to note is that Gold price has all fallen back to pre QE3 levels for all quoted currencies above. Despite the recent downtrend, Gold is still close to yearly highs, and there are significant support lines in wait should prices fall further.
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