The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Gold’s selloff brings bearish flag formation
The substantial sell off yesterday took back much of the gains in the middle of last week. With price consolidating, there is a high likeliness that we are going to bounce up, simply due to the fact that the current trend is towards higher highs and lows. However, with the current consolidation forming a flag rather than a more substantial bounce higher, there are also warning signs that further losses could be around the corner.
As such, I will await a break from this formation, with a break lower likely to point towards a move to $1178. Otherwise a move towards the upside could bring another major leg higher with initial resistance at $1192 for gold.