Gold markets broken down significantly last week, marking well below the $1500 mark, a very negative sign, but when you look at the weekly chart, you can see a bullish flag.
But, this market needs to save itself quickly or it will be serious technical trouble. The $1450 mark will continue to keep a bit of support into the market based upon the ascending triangle on the daily, but at this point it looks likely to cause a reaction.
If the flag pans out, and gold break above the Top of it, the market could then go towards $1800.
But, if $1450 is broken, then $1400 will be tested, and then eventually the $1350.
This is mainly due to the US-China situation being all over the place, and as things looked very positive in the middle the week, we saw the “safety trade” rollover as the gold market offers that safety.
Now, there will be a lot of volatility, but sooner or later we should see some type of impulsive candlestick that we can track. This will swing back and forth due to the risk appetite involving all things China, which moves with the strength of USD and latest Tweet or headline.
Have a terrific weekend