Commodities
Spot Gold (XAU/USD) Threatening Weekly Support
Clocking a $2,048 peak mid-month has the yellow metal on track to chalk up a dominant upper candle shadow on the monthly timeframe. Further losses this week would end the month in the shape of a bearish Shooting Star candlestick pattern.
The weekly timeframe shows that last week ended just shy of session lows, down 1.1%. This places a bold question mark on support at $1,988, which, for me, is the last line of defence until as far south as support coming in from $1,807. Therefore, this will be an interesting watch over the next few weeks. I also see early signs of negative divergence from the Relative Strength Index (RSI), a whisker south of the overbought space (70.00).
Meanwhile, on the daily timeframe, price action is shaking hands with the lower boundary of a local ascending channel taken from the low $1,934. We can also clearly see the precious metal finding comfort below the widely watched $2,000 level. If we engulf current channel support, support warrants consideration at $1,949, closely shadowed by the 50-day simple moving average at $1,919 and longer-term channel support extended from the low $1,1616.
On more of a shorter-term timeframe, movement on the H1 scale has price rebounding from support at $1,972, which happens to converge with the local channel support on the daily scale. As such, extending the rebound from current H1 support should not surprise this week, taking aim at H1 resistance from $1,992, sheltered just south of $2,000 and H1 resistance at $2,001.
Overall, chart studies show bearish players may have the upper hand going forward in the medium term, particularly if the unit begins exploring beneath the weekly support mentioned above at $1,988. With this in mind, space between $2,000 and $1,992 could be an area sellers make a show from this week on the H1 if additional recovery gains materialise. Though should $2,000/$1,992 fail to welcome price this week, a H1 close beneath the $1,972 support could have breakout sellers aim for H1 support from $1,964 and $1,955.
