Gold prices plummeted more than 1.7% on Friday, reaching a fresh six-month low of 1275.30 after the bounce off the 1303 resistance level. The neutral bias shifted to bearish as the price penetrated the trading range 1289 – 1307.50 to the downside, experiencing further losses. Despite the latest upside pullback, the bearish picture in the short-term is further supported by the technical indicators.
Momentum indicators in the 4-hour chart are holding in the negative threshold. The RSI indicator is flattening near the 30 level after the rebound on the oversold zone, while the MACD oscillator is falling sharply below the zero line.
Further losses should see the 38.2% Fibonacci retracement level near 1272 of the upleg from 1122 to 1365 coming into view. A drop below this significant level could open the way towards the 1250 support level, taken from the low on December 2017.
In the event of an upside reversal and a jump above the 1282 resistance level, the price could hit the 1289 resistance level. Clearing this key level would lead the way towards the 20- and 40-simple moving averages (SMAs) both near 1295.
Overall, the precious metal has been developing within a downward sloping channel since April 11, indicating that the price remains in bearish mode in the medium term.
