Gold Analysis: Technical Tuesday - November 26, 2024

Gold analysis: After the big sell-off on Monday, I will try to examine what this means for gold in terms of direction in the near-term outlook, purely from a technical point of view.

Technical gold analysis: Trend reversal or a mere pause?

The near-term direction of gold prices has turned bearish from a technical point of view after the metal sold off sharply on Monday, forming a large bearish engulfing candle on the daily chart. The selling started as prices encountered resistance exactly where one would have expected: the area around $2708 to $2725 (shaded in dark orange colour on the chart). This area had previously served as a key support level, then gave way when gold prices initially sold off on the election day. Now that prices have retested this zone, it has held firm as resistance, which is unsurprising. Whether or not this is a complete trend reversal, or a mere pause remains to be seen. It is far too early for that discussion. But what it means is that traders should take it from one level to the next until we have some more price action to work with. Remember, the long term trend is clearly still bullish and so we could just be in the middle of a long-overdue correction or consolidation phase.

Source: TradingView.com

Gold analysis: key levels to watch

Looking ahead, the key resistance area to monitor on the gold chart is now starting from $2643 to $2668, the latter marking the low from Friday's range, when it was engulfed by that sell-off on Monday. As long as prices remain below this area now, particularly $2668, the path of least resistance will be to the downside, chiefly following that bearish signal from Monday. However, if gold closes above $2668 on a daily basis, it would invalidate this bearish technical setup.

Focusing on the downside, the next potential support level, should the selling pressure persist, is at $2580. This level represents the base of a prior breakout from mid-November and holds considerable importance in the short-term outlook. If this support gives way, gold could dip into a longer-term support zone between $2500 and $2530, highlighted in blue on the chart. This zone had previously been a breakout area but has not yet been retested from above since that breakout occurred in the second week of September.

In a longer-term perspective, continued selling could bring the 200-day moving average and the $2400 support area into focus. However, those levels will be addressed if and when the market moves toward them. For now, the abovementioned levels are the critical levels shaping the short-term technical gold analysis.

Video: Gold analysis and insights on WTI and EUR/USD

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.