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Fan Yang

Gold Continue to Shine; Beware of Sellers

Gold has been consolidating in November after breaking the 2013-2014 consolidation low around 1180 and reaching a new low on the year at 1130.

Gold (XAU/USD) 4H Chart 11/17(click to enlarge)

As we can see in the 4H chart, gold was consolidating in a triangle last week. At the end of the week, there was a break below the triangle but this bearish signal was quickly reversed and followed by another bullish correction swing.

Gold (XAU/USD) Daily Chart 11/17
(click to enlarge)

While the last 2 weeks of price action suggests some more short-term consolidation/correction, we should expect sellers if price rallies to the 1220 area, especially if the daily RSI approaches 60 and stalls. If price also stalls under the falling trendline from July, we can anticipate a bearish continuation attempt at least to test last week's consolidation-central-pivot around 1160, then the common lows around 1140. 

A break above 1240 might shift the mode in gold from bearish to neutral in the medium-term.

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