Gold Technical Analysis Report – 19th October 2012 – Gold At One Month Low
- The XAUUSD (spot gold) has traded into fresh one-month lows today as the market comes to terms with worse than expected earnings reports and the US dollar gained accordingly. Commodities are being dragged lower with metals along with oil amongst the losers; oil closed at $90.09 and down $2.
- When referencing the attached gold weekly chart we can see that the precious metal is heading for a second consecutive weekly basis fall. This is the first time since this May that two weekly declines have been seen for the price of gold.
- The technical resistance level around $1800 has proved to be too strong a hurdle for the gold bulls after the sustained upside move following the triangle breakout in July. Profit taking at this level may be in part attributable to the recent downside move. Gold could be in need of a fresh catalyst in order to break through the stubborn $1800 per oz level.
- A close near the current level would see a weekly timeframe bearish engulfing candle form. If this momentum continues into next week, and gives a confirmation move under this bearish engulfing candle, the downside pressure on XAUUSD may continue in the short term and open up a potential move to the $1700 area.
- The $1800 handle continues to be the key resistance point on any move higher for gold.