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.