Is Gold’s Bullish Run Coming To An End?

• 4 Jan 2018

GOLD

Gold appears to have met a market top illustrated by two consecutive bearish candles following a bullish run. The metal has reached overbought conditions with a break of upper Bollinger band and a move beyond the 70 resistance level. A break below the 1309 price level (which represents a precious resistance line) will provide more weight to the downtrend. Further confirmation comes from RSI with a break below the 70 resistance line.

Impact event: ADP Private Payrolls data will be released at 15:15 GMT+2 and will impact USD pairs and Gold.

SILVER

Silver prices have followed the same trajectory as Gold, with prices breaking the upper Bollinger band and RSI bouncing off the 70 resistance line. Bearish momentum should send the metal towards the 16.86 support line and a break will provide confirmation for the downtrend.

EUR/USD

The EUR/USD appears to be on the verge of a reversal with a break back below the upper Bollinger band and a drop below 70 on RSI. However, this was immediately followed by a bullish response. Fundamental factors later today are likely to impact the near-term direction for the pair.

AUD/USD

Surprisingly, the trajectory of Gold has not been reflected in the AUD/USD pair despite the pair’s long-term positive correlation. Despite reaching oversold conditions on RSI, momentum appears to be positive. The next price target for buyers will likely be the 0.7888 price level which represents a previous resistance area.