Wednesday, December 06, 2017

Gold Is Heading For A Test Of Historic Support Zone

The expectations that Gold would rally did not come true, on the contrary, it broke out below the support trend line of the channel after it formed a gap at the end of last week that it did not recover and it continued depreciating.

The metal has not overcome the zone around 1260 – 1265 (marked in blue) which has been a key support zone in the past few weeks as it can be observed on the W1 time frame.

In case Gold breaks out below that zone (and the chart hints there will be a breakout) we could expect that it will continue falling to test the next strong support around 1190-1180 (marked by a red line). This has been a key historical support for the precious metal as it can be seen on the monthly time frame and if the depreciation continues I think we will see a new test of that level.