Last week was a strange week for trading Gold, with the price false breaking above local resistance, just to fall back into the range and trading for the rest of the week between support and resistance. Friday, on closing hours, Gold has fallen hard and has finished the week near the low and exactly in the bottom of the range. However, if we look at the chart, the structure is still bullish as long as the price is above 1830 resistance.
After breaking above the neckline of an H&S, the price lacked strong continuation, as normal in this situation, and started to consolidate. On Friday XagUsd's price fell back under the neckline, which is a very bearish sign. A continuation to the downside gives scope to a drop at 23 zone, around 7-8%.
Personal notes:
- I tend to "believe" Silver and I expect a fall for both PMs - A drop in Silver of 8% would equal, usually, a drop in Gold around 3%, so, around 500 pips. That would put Gold under 1830 support and even under 1800 which is also a very bad sign for bulls.
In conclusion, I will look to sell rallies on both Gold and Silver and only if they break above previous hights I would change my bearish opinion