Like the S&P 500(NYSEARCA:SPY), Gold pulled back to a key Fibonacci and price overlap target.
If you’re trading Gold, frame your trades in terms of the departure “away from” this area.
But first, let’s chart the development and pinpoint this key pivot:
We’re seeing @GC (Gold) on the Hourly Chart with a short-term Fibonacci Grid from low to high.
The 38.2% Fibonacci Retracement overlaps the $1,215 area which is where price is trading currently.
We’ll see in a moment that price broke down from a key Daily Chart level into this short-term make-or-break target.
A bearish pathway opens toward $1,200 and $1,180 if beneath $1,215 while a “support bounce” reversal triggers on a rally today or tomorrow “up away from” $1,215.
Here’s the Daily Chart breakdown and price structure:
Gold tumbled into a new Daily Downtrend from $1,400 toward $1,120 ahead of a reversal higher in December.
Price achieved the gold of testing the underside of the falling 200 day SMA near $1,265.
From there, negative divergences into this key pivot set the stage for a pullback “down away from” $1,260.
We’re seeing a breakdown beneath the 20 and 50 day EMAs which take us again to our short-term Fib Target.
Focus on the intraday chart ($1,215) and note the downside potential if buyers don’t step in to buy Gold here.