Gold has encountered significant selling pressure over the past three trading sessions, establishing a technically significant bearish formation that has captured the attention of market analysts. The precious metal's consecutive daily declines have produced what technical chartists recognize as a "three red crows" pattern, a formation that historically signals potential trend reversals and extended downward momentum.
The three red crows pattern represents a powerful bearish signal that emerges when selling pressure overwhelms buying interest across three consecutive trading sessions. This formation is characterized by three long-bodied red candlesticks that typically exhibit minimal or absent upper wicks, indicating that bears maintained control throughout each session with little relief from bullish forces. The pattern's significance lies in its ability to mark inflection points where previously dominant uptrends begin to weaken and potentially reverse direction.
From a technical analysis perspective, the emergence of this pattern suggests that gold may be transitioning from its recent bullish trajectory into a more sustained bearish phase. The pattern's reliability as a reversal indicator has made it a closely watched formation among professional traders and institutional investors who rely on technical signals to guide their positioning decisions. The absence of significant upper wicks in the formation indicates that any attempts at recovery during these sessions were quickly overwhelmed by renewed selling pressure.
The implications of this technical development extend beyond mere pattern recognition. The three red crows formation often serves as a precursor to extended corrective phases, suggesting that the current weakness in gold prices may not be merely a temporary pullback but rather the beginning of a more substantial downtrend. This technical deterioration occurs at a time when fundamental factors have also begun to weigh on precious metals sentiment.
Current market conditions reflect the pattern's bearish implications, with gold futures trading significantly lower in extended session activity. As of 5:25 PM ET, gold futures have declined by $37.90, representing a substantial 1.12% decrease to reach $3,335.60 per ounce. This latest decline extends the metal's weekly losses to $17.00, or 0.51%, demonstrating the sustained nature of the selling pressure that has emerged over recent sessions.
Silver has exhibited similar technical weakness, mirroring gold's three-session decline and reinforcing the broader bearish sentiment affecting precious metals markets. The white metal is currently trading down $0.86, representing a significant 2.19% intraday decline. On a weekly basis, silver has posted a more modest decline of $0.10, or 0.26%, though this understates the intensity of recent selling pressure.
The convergence of technical deterioration with fundamental headwinds creates a compelling case for continued weakness in precious metals markets. The three red crows pattern provides a framework for understanding the current price action while offering insights into potential future direction. Should this technical formation prove prescient, market participants may need to prepare for an extended period of downward pressure in gold and silver prices, with the current correction potentially developing into a more significant trend reversal.
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