(Kitco News) - Gold has moved back in recent weeks and looks to be testing an important zone. At the red shaded area, the price is currently very close to the consolidation low. If this low breaks, it would make a lower high lower low formation and potentially become the start of a new longer-term trend down.
This is a monthly chart so on the lower timeframes there will be waves that need to confirm the move but the recent weakness in the yellow metal cannot be ignored. Most central bankers have confirmed they are willing to do what it takes to improve the high inflation rates. This means fixed income yields could rise further causing more havoc to the precious metals complex.
On a more technical note, the green support line confluences with a 50% Fibonacci retracement. This level was also used as a consolidation support back in 2012 and might be useful again. All of this is based on if the current consolidation low of $1676/oz breaking again and the price closing below the area. The month of September looks pivotal for the safe haven asset class.
