Daily Price Action
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Gold: 1200 More Significant Than You Realize

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Last Friday I mentioned that it’s not a good time to be bullish gold. The market had just closed below the 1215 key level and looked ready to retest 1200.

In fact, that’s exactly what I wrote in Sunday’s forecast:

The most likely scenario, in my opinion, is a decline to channel support near 1200. A daily close below that would open up the October lows at 1180 followed by the year-to-date low at 1160.

Sellers didn’t waste any time taking the market down to the 1200 handle. Monday’s session closed right on it (1200.11 to be exact), and gold has been bouncing around above it ever since.

The last 48 hours of price action are exactly what you want to see if you’re bearish. The slight bid at 1200 confirms that market participants are paying attention to this ascending channel.

Furthermore, the lack of a meaningful bid at 1200 suggests a breakdown isn’t far away. That’s just my opinion of course.

You may recall the last few lines of Friday’s post. I wrote something that probably grabbed your attention.

In case you missed it, here’s what I wrote:

I’ll be keeping a close eye on gold as the price action within this channel unfolds. If the market treats this as a continuation pattern, the objective would be, well, a very long way down.

So how far down is “a very long way”?

Let’s take a look.

But before I show this I want to make one thing very clear:

This is all theory and speculation at the moment. Measured objectives like the one you’re about to see can be helpful. However, they never come with a guarantee.

With that out of the way, let’s do some measuring.

If the market treats this latest consolidation as a bearish flag pattern, the measured objective could be as low as the 2015 low of 1045.

Gold measured objective on daily chart

That assumes two things:

  1. The April 2018 high is the start of the flagpole
  2. The October 2018 high is the top of the flag pattern

If either one of those is incorrect, then our 1045 figure will need to be adjusted.

For example, if the flagpole began at the June 2018 high instead, then the objective is closer to 1095.

Either way, it’s a long way down.

Keep in mind that everything above rests on the idea that the channel below is a continuation pattern. If it isn’t, you can forget everything you just read.

As for now, sellers need to force a daily close below channel support near 1200. Until then gold is susceptible to bounces that could reach back to new resistance at 1215.

Want access to the same charting platform I use? Go here.

A daily close below channel support near 1200 would expose the October lows at 1180 followed by the year-to-date low at 1160.

Alternatively, a close back above 1215 would signal that buyers aren’t finished carving this channel. It would also open the door to resistance at 1235.

Important: I use New York close charts so that each day closes at 5 pm EST.

Click here to get access to the same charts I use.

XAUUSD ascending daily channel

Leave a Comment:

32 comments
Moustafa says

hello

sorry Gold going Up for 1 Year trade at least

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    Justin Bennett says

    Perhaps. Anything is possible. But I’ll let the market speak for itself as always.

    Reply
      Chido says

      Gold now aproaching 1210

      Reply
        Justin Bennett says

        No surprise there. I wrote that bounces were likely above 1200.

        “As for now, sellers need to force a daily close below channel support near 1200. Until then gold is susceptible to bounces that could reach back to new resistance at 1215.”

        Reply
          Aboong says

          Please look at the monthly chart and see the falling trendline (by connecting 1909 high of 2011, 1787 high of 2012 and 1160 low of 2018). The price clearly breached this down trendline which is a clear bullish signal. I think bullish Gold movement hold until the price go below this down trendline.

          Reply
          Justin Bennett says

          I commented on the same trend line a while back. The analysis above is simply a different perspective.

          Reply
Margaret says

Thanks for the fx insight, it really serve as a helping tool in my research towards trading.

Reply
    Justin Bennett says

    You’re welcome, Margaret.

    Reply
Mauroof says

thank you

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    Justin Bennett says

    You’re welcome.

    Reply
Siyabonga Mkhize says

Thank you Justin, really appreciate it

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    Justin Bennett says

    Always happy to help.

    Reply
apicit says

thx:)

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    Justin Bennett says

    You’re welcome.

    Reply
George says

You know what you talking about very well! Bears have just let go and bulls pushed up to 1215 just as I finished reading your analysis.

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Nyala says

Love your analysis sir ,tha is so much for helping.

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    Justin Bennett says

    My pleasure. Glad you enjoy it.

    Reply
Euphemia Nwachukwu says

Thanks Justin for your analysis on gold,it is going as you said it. it has tested 1215 as resistance, and is making a downward move. Let us see how the candle will close at the end of today,

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    Justin Bennett says

    You’re welcome.

    Reply
Lyall says

The information you provide is so helpful you go into detail thanks for taking your time to share this with us I read every single article hope to be as wise as you are one day 😉

Reply
    Justin Bennett says

    Pleased to hear that. Thanks for sharing!

    Reply
Bilyaminu says

Thank you bennett

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    Justin Bennett says

    You’re welcome.

    Reply
Colin de Ste Croix says

Im liking 1160 as a target. And silver at 13.020 October low of 2015?. Looking at an entry at 14.200/25

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Mona says

Gold closed at 1210 so going up, right

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    Justin Bennett says

    See the last two paragraphs of the post.

    Reply
tebza marvin says

very good .but i see a long term the analysis..but now on a daily chart its closed on our support with a morning star (reversal pattern)..so will i be wrong if we can project price 1230,30 and 1245.86…before the breakouts to the downside..

Reply
    Justin Bennett says

    Varying opinions are what make a market.

    Reply
pipsniper says

Hi Justin , my trading style is consistently similar to most of your analysis, though always keen to learn more…any course available? i’m always investing in price action traders courses specially learning from good traders.

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Biodun says

Thank you Sir

Reply
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