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Gold Rally Vulnerable Below 1318

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On February 20th I wrote about a rising wedge pattern on gold.

The market was testing wedge resistance at 1345 as I was writing that commentary.

By the New York 5 pm EST close, gold had carved a bearish pin bar.

Remember that I use New York close charts. You can go here to get access to the same Forex charts I use.

That pin bar took gold back to key support at 1323.

The market remained there for a few days. However, yesterday’s session closed below 1323 and also tested wedge support near 1318.

We saw buyers take gold higher earlier today, but they were unable to keep their heads above the 1323 area which is now serving as resistance.

That brings our attention back to rising wedge support near 1318.

If sellers manage a daily close (New York 5 pm EST) below 1318, we could see gold slide lower toward the 1300 support region.

In fact, if 1318 gives out this week, I would suspect we will see gold move lower toward the wedge inception point at 1280.

Gold could give up even more ground, but that’s my base case scenario.

The flip side is, of course, a close above wedge support near 1318. If that occurs, it will keep the rally intact a while longer.

That said, the rally that began last August is starting to get overcooked so a pullback to 1280 or even 1260 wouldn’t be a bad thing for gold bulls.

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XAUUSD rising wedge pattern

Leave a Comment:

22 comments
Priscilla says

Thanks Justin. Appreciate a lot. Finally understand your analysis.

Reply
    Justin Bennett says

    You’re welcome. Thanks for stopping by.

    Reply
Ali Asad says

good

Reply
Sihle says

Thank you Justin.

Reply
    Justin Bennett says

    My pleasure.

    Reply
Adebayo saheed says

thanks….your analysis always open my Eyes

Reply
    Justin Bennett says

    You’re welcome.

    Reply
      Sihle says

      I’m in profit, sold gold @ 1314.77 and I am on 170pips and gunning for the 1300.00 target. Thanks once again for your sharp analysis and wisdom. 😉

      #JHBSouthAfrica

      Reply
        Justin Bennett says

        Cheers. You’re welcome.

        Reply
nadzuah says

thank you justin

Reply
    Justin Bennett says

    You’re welcome.

    Reply
DESTINY ISIBOR says

Thanks Justin. Your analyses are always simple, precise and insightful. Thanks

Reply
    Justin Bennett says

    My pleasure. Thanks for the feedback. Glad you’re enjoying the content.

    Reply
Pinds says

Hi Justine,
how do I calculate Gold pips?

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    BothieC of Zim says

    It so easy man!
    Let’s say Gold fell from 1315.05 to 1300.02
    You just deduct the numbers and multiply the answer by 10.

    Or multiply each the Gold prices(your entry and the exit) by 10 then directly the answer subtract the lessor from the greater.. You will get your Pips!

    Connect with me on +263 718 165 622 for more chats!

    Reply
    Justin Bennett says

    What do you mean by “calculate”?

    Reply
Uzoma Nnamdi says

Thanks sir, I’m shot on gold below 1318

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Eric says

Wow ! did you ever get that one right.
Thanks.

Reply
    Justin Bennett says

    Anytime, Eric. It did work out nicely for us.

    Reply
      Pierre Mifsud says

      I agree this time with everything from you….that confirms USD strength and GBPUSD fall down to the 1.29-1.28 handle as mentioned beforehand contrary to your 1.3440 target…..On the weekly time frame I also see a XAUUSD short, down to 1212 handle, not an impossible feat at all.

      Reply
        Justin Bennett says

        Cheers, Pierre. Thanks for commenting.

        Reply
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