Gold has been on a steep downtrend in the second half of the year and is on track for the biggest annual loss in over 30 years. The precious metal is losing its safe haven quality and many do not see it as a store of value as they move to equities which have been enjoying strong rallies recently. The Fed’s announcement to taper has accelerated gold’s decline.
A daily technical analysis show that prices are below the downtrend line and the 20-day moving average, while the RSI and stochastic are also giving bearish signals.
Gold has almost retraced all of the rally from the June 23 low to the August 25 high and is currently well below the 61.8% Fibonacci retracement level of this move.
After a bearish reversal on December 27, gold has slipped back below the key 1200 level and is currently testing this level on the last day of 2013, close to a 6-month low of 1187.08 hit on December 19. This low will be closely watched as it acts as immediate support. A break below this will open the way to the June 23 low of 1180.11.
There is room for more gold weakness in the short and medium term. In case of a break below the key 1180 level this would accelerate a decline towards the 1000’s.
Gold has been on a steep downtrend in the second half of the year and is on track for the biggest annual loss in over 30 years. The precious metal is losing its safe haven quality and many do not see it as a store of value as they move to equities which have been enjoying strong rallies recently. The Fed’s announcement to taper has accelerated gold’s decline.
A daily technical analysis show that prices are below the downtrend line and the 20-day moving average, while the RSI and stochastic are also giving bearish signals.
Gold has almost retraced all of the rally from the June 23 low to the August 25 high and is currently well below the 61.8% Fibonacci retracement level of this move.
After a bearish reversal on December 27, gold has slipped back below the key 1200 level and is currently testing this level on the last day of 2013, close to a 6-month low of 1187.08 hit on December 19. This low will be closely watched as it acts as immediate support. A break below this will open the way to the June 23 low of 1180.11.
There is room for more gold weakness in the short and medium term. In case of a break below the key 1180 level this would accelerate a decline towards the 1000’s.
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