- Gold (in US$ terms) has already broken below a rising channel that was in place since March 2020
- The metal also broke below the support line of a Descending Triangle pattern (1900) yesterday, but failed to close underneath it
- Today, price is retesting the support line of 1900
- A daily closing underneath 1900 will be a bearish development and would signal at lower prices in the short-term
- Based on the width of the Descending Triangle and the rising channel, downside targets would be around 1790 followed by 1735. Invalidation point would be 1973
- Notice that the move lower in gold in recent days has also coincided with dollar strength, with the DXY index recently breaking out of an inverse H&S pattern
- Hence, it is imperative to keep an eye on the DXY as well, to gauge its potential impact on the price of gold
To learn more about classical price patterns such as triangles and H&S, click here
To understand the correlation between gold and dollar, click here
