Gold Price: downside pressure is growing

London (Nov 26)  A failure of the recent rally to make any impression on the resistance band $1474/$1480 is certainly now weighing on the market. Downside pressure is growing as another negative session and bear candlestick yesterday closed below support at $1456 to re-open the November lows again around $1445. With momentum indicators all in bear sequence turning lower from under their neutral points, there is a real sense that the next break of key support could be close. RSI below 40, along with the struggles on MACD and Stochastics reflect a market ready to use rallies as a chance to sell. With the run of lower highs and lower lows in the past few months, the medium term outlook remains corrective and we see near term strength struggling.

An early rebound today looks to be another opportunity. The hourly chart shows an unwinding of momentum to renew downside potential. Around 60 on hourly RSI and around neutral on hourly MACD seem to be limiting the buying momentum.  A closing breach of $1445 would be the latest breakdown and would open $1430 initially but the medium term test of $1400 should not be ruled out.

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