Longer-Term Technicals for Gold Turn More Bearish; Downside Targets RevealedBy Jim Wyckoff
Monday July 20, 2015 13:17
(Kitco News) - Price action last week and early this week in nearby Comex gold futures has produced fresh, significant longer-term technical damage to suggest still more price pressure to come in the days and weeks (or longer) ahead. An examination of the monthly continuation chart for nearby Comex gold futures shows prices are in a nearly four-year-old downtrend from the all-time high of $1,923.70, scored in September of 2011. Prices Monday hit a 5.5-year low of $1,080.00 an ounce.
The monthly gold chart also shows a bearish downside "breakout" has occurred from the recent sideways and choppy trading range. The breakout to the downside of the trading range suggests a fresh leg down in prices is coming, and that Monday's low in gold is not likely to hold.
The next longer-term downside price target for gold is major psychological support at $1,000.00. It would not be at all surprising, from a technical and historical perspective, for gold to hit this mark at some point in the not-too-distant future. A fall below that key price level would then open the door to still lower prices, with an ultimate downside objective being the 2008 low of $681.00.
It would take multiple daily closes in nearby Comex gold futures above longer-term technical resistance at $1,250.00 to suggest, from a longer-term technical perspective, that a major market low is in place.