Gold prices lose 1.0% while declining to $1,939.70, intraday low of $1,97.80, during the pre-European session on Thursday. The yellow metal’s declines marks its U-turn from the upper line of a short-term symmetrical triangle formation established since August 12.
With the consolidation in gold prices joining bearish MACD, sellers cheer a downside break of 1-day EMA, which in turn directs the quote towards the triangle’s support, at $1,920.80 now.
It should, however, be noted that the bullion’s further weakness will depend upon how long it stays below the 50-day EMA level of $1,915.81.
On the upside, gold buyers’ ability to regain 21-day EMA support, currently around $1,945.85, will direct the moves towards the triangle’s resistance line near $1,968.
In a case where the bulls manage to cross $1,968 on a daily closing basis, the monthly top around $1,992 and the $2,000 psychological magnet will be their next choice.
Trend: Further weakness expected