Is The Bull Market In Gold Over?

The quick answer to the question is…. It depends on which time frame your looking at.

On the daily chart, you can see the last three months has seen the Gold price slowly retreat to lower high’s as the bullish sentiment appears to of faded. On the bullish side the price retreat had been minimal over the last few months. However last week when we saw a sharp drop breaking below the key $1,473 level, finding some support at $1,466 which was also a prior resistance level.

Since the breakout last week, we saw a mild retracement where it tagged the trailing 10 day moving average as well as the downtrend channel & resistance area of $1,473. So, given the strong overhead resistance if it fails to clearly close & hold above this level this week, I would expect a move back to $1,466 support with a short term target over the next few weeks to potentially as low as $1,400 area.

On the weekly chart the bigger picture looks much more bullish & promising over a longer term horizon. The weekly chart shows the breach of the mild pullback in prices over the last three months, which isn’t ideal for the bulls. However, looking at the weekly chart you can also notice the strong run Gold has experienced since June to August, compared to relatively weak pullback in prices over the next 3 months.

Since we saw a strong run the price action on the weekly chart, the price action had stretched too far away from its average distance relative to the 52 week moving average (MA) (green line). Which is why I have been previously calling for a pullback to occur for a few months, in order for the moving averages to catch up to price.

The good news looking on the longer term charts is that we are getting closer to the end of the pullback in prices, where I see a move towards $1,425 support, or worst case scenario a pullback to $1,385. From these levels I would expect buying support to kick in, with an eventual resumption of the longer term bull trend and a move to new record highs over & above $1,900 potentially as soon as 2020.

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Disclaimer: This post is for educational purposes only, and all the information contained within this post is not to be considered as advice or a recommendation of any kind. If you require advice or assistance please seek a licensed professional who can provide these services.