Early in NY, gold prices were down .54% to $1,176 an ounce by 8:32 AM EST. Price action on the gold daily chart shows the recent $30 slump that has been firmly in place since Wednesday’s FOMC decision. Bearish momentum is also accelerating on the break of the 50-day SMA.
The chart above displays that a potential bullish Gartley pattern could emerge if price falls slowly to the $1,160 level. If we see the current plunge immediately test that level, the pattern may be invalidated and further support may target the $1,140 region.
If U.S. dollar strength returns strongly next week, further downward pressure on the precious metal may target the $1,090 area. To the upside, $1,190 and $1,210 will serve as key resistance levels. If price does have a daily close above, $1,210, we may see a clear path towards $1,225.
The trade: Sell Gold at $1,176 with a stop loss at $1,184 and a take profit at $1,160. The Risk/Reward Ratio is 1: 2
Edward J. Moya
Senior Market Strategist
WorldWideMarkets Online Trading