Gold was sharply lower in early trade this morning. Once again, selling pressure pushed prices down below $2,900. There appears to be a bit of support around $2,880.
Source: TN Trader
This marked the low back on Friday, 14th February, when gold had a big negative session, giving back a fair proportion of the gains made throughout that week. It has held as support since then. But gold remains overbought according to the daily MACD, and the indicator is now pointing south suggesting an increase in downside momentum.
Gold will need to fall further to take the MACD towards more neutral levels, and an obvious target is the high hit back at the end of October, just below $2,800. An alternative way to reset the MACD would be a long period of sideways consolidation.
That can’t be ruled out given the recent steady rally in gold prices, particularly since mid-December. But much will depend on the strength of the buyers’ resolve. Silver has also sold off significantly since last Friday. But it has held up better than gold so far this week.
