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Gold price technical analysis

Kitco Media
By Rajan Dhall
Published
Updated
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(Kitco News) - The gold price has been increasing in recent sessions and now the price has converged into a chart formation on the 4-hour chart. Looking at the graph below the price has been heading towards the 50% Fibonacci level and this confluences with a previous support (now resistance) at $1732.50/oz. This does not mean the good times are over but there is a level that needs to be taken out.

The pattern is a bear flag wedge-type formation marked by the red lines in the chart. A break of this formation could help forecast the future trajectory of the yellow metal. Ahead of this, the 61.8% Fibonacci retracement zone has been used in the past but this is far off closer to $1762.50/oz.

On the downside, the big support is at $1690.43/oz. This is the consolidation low and a break of the pattern would be needed for the price to move lower. For now, the price is moving higher with higher highs and higher lows and a confirmation of the trend continuation would be a break of the previous wave high at $1735.10/oz.

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Rajan Dhall

Rajan Dhall is a financial analyst that has been in the trading industry since 2009. From working in Canary Wharf (London) as a head trader to becoming a journalist on a real-time news desk, Rajan has worked his way through many positions in the financial sector. The main area of Raj's expertise lies in technical and statistical analysis. Rajan currently lectures technical analysis with the Society of Technical Analysts (STA) at the London School of Economics. One of the main areas Rajan has based his analysis on is probability. Raj completed his certification (probability) with Harvard and regularly uses probability theories in his analysis as he feels it helps him add value to his clients and customers.

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