Gold resisted and trading down but is it bearish?
Year – year trend, resistance prevails
Although as excited as most gold bulls, I did remind that year – year, gold/xauusd remains on the down trend unless 2015 high is broken decisively. This was covered previously ‘Gold bullish strong resistance overhead; year – year down intact‘ and ‘10 weeks at this resistance, time for XAUUSD to find support‘.
These are the two charts that matter most. Note the most prominent feature in these two charts is the downward equidistant channel.
— Soh tiong hum (@Sohtionghum) March 10, 2016
Here we are, weeks later.
‘Reversal’ story remains intact
Gold bulls should not worry excessively however. After such a blazing rally, it is likely that the current correction is driven by profit taking rather than a true sell-sell. The way I see it, something did change on the bullish side. At least on a 6-month basis, this year’s early rally did terminate the previous down trend since 2012. So all that has to happen in favour of bulls now is for a price support to be found, to make a higher low that will attract bullish entrants that will push price to a new high.