Gold reverses sharply after making new, mid-term high

In today’s analysis, we will take a look at Gold, which yesterday managed to set new mid-term highs and for some time climbed above 1830 USD/oz, which was the highest since the end of June. Although the fact of making those highs is positive, quick reversal and abandoning them can be quite worrying. Can that be a start of a larger bearish reversal?

As for now, we do not have enough evidence to claim a bearish reversal. We have some hints though. Gold failed to hold above the 1823 USD/oz support (yellow), which was crucial in December. The reversal from yesterday creates a long head on a daily and H4 candle, which is negative. What is more, on Wednesday, traders are following the bearish path dragging the price to this week’s opening.

On the chart, we have two crucial dynamic supports red and blue. As long as we stay above those two, bullish sentiment is alive. The price breaking those two would be a major sell signal, and let’s see if a bear is committed enough to make it happen.