This past Monday I wrote about how gold had reached a confluence of resistance at 1322.
It’s the intersection of rising wedge resistance and a horizontal level that has played a role since January 2018.
When I wrote Monday’s post, the market was trading just below 1322.
Fast forward to today, and you can see that gold is now around 1310.
But the significance of Wednesday’s move comes down to a level I pointed out on Monday.
Like any rising wedge, the one below hinted at exhaustion from buyers.
However, up until a few hours ago, this pattern was on the more speculative side. That’s because gold was still trading above wedge support on a 4-hour closing basis.
All that changed earlier in Wednesday’s session.
With gold now below former rising wedge support, buyers are going to have a much more difficult time reversing this week’s bearish momentum.
In fact, Wednesday’s breakdown re-exposes a familiar target.
I wrote about the 1280 handle as a target for gold on February 28th.
You can even see a portion of that same pattern on the left side of the chart below.
As long as the market stays below former wedge support (new resistance) near 1314, I will maintain a bearish bias.
And just like in late February, the target is the most recent wedge’s inception point at 1280.
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