A little bit more about the ongoing battle on this precious metal could be sought in the daily chart
, where we see two major forces are in effect, to name, thin and the thick trendlines
, both of which acted as a support and then broken to become a resistance. The thin red line, we do not seem to care about it pretty much, since Gold
is trading way below its area of force, so the latest price action is determined by the purple resistance in general, and the thick red line in particular, because of two reasons. First, it is responsible for the latest drawdown after the top at the 1190 level. So it is important for us in particular to understand the ongoing battle (for more information about the little details on that very battle, you may check "1.23#1"). Secondly, the thick red line acts ac
a combined resistance force which is responsible for the entire price action all the way from 1920, 6th of September 2011. So, referring back to "1.23#1", we may conclude that the minor resistance could not do against the green line without the help of the major resistance (the thick red line).
But why did green line show this much power? It had been the steepest resistance, which then turned into a support. But the fact that it is actually a support hasn't been clarified yet. The battle still goes on. There are two options now. Either we experience a major reversal, or the price continues to the downtrend which began in September 2011. But to evaluate the power of this entire downtrend, we need to look even earlier times in the history.
To be continued...