Gold moved lower over the previous week following the pullback from the 4-month high of 1344. The price snapped the five weekly winning sessions and posted a negative week as it lost momentum. The short-term technical indicators seem to be turning negative and point to more weakness in the market.
In the 4-hour chart, the RSI indicator is pointing slightly to the upside near the 50 level, whilst the MACD oscillator lost its momentum and is flattening near the zero line. Moreover, the 40-simple moving average created a bearish crossover with the 20-SMA, indicating further losses.
If price action remains below 1344 (immediate resistance), there is scope to test the immediate support at 1324. Clearing this key level would see additional losses towards the 1300 – 1305 support zone. Also, falling below it could see prices creating a strong sell-off until the 1263 support level.
Conversely, upside moves are likely to find resistance at 1344. A climb above 1344 could see gains towards the 1357 barrier, which is near the upper boundary of the weekly symmetrical triangle.
It is worth mentioning, in the long-term timeframe, that the price has been trading within a symmetrical triangle over the past two years as it failed to post a higher top from 1375 on June 2016. The price failed to extend its gains above the aforementioned level and has been creating a continuation pattern, indicating a breakdown as the previous tendency was a descending move.
