Bearish signals in gold set up a drawdown potentially to $1630
June 14, 2022 @ 16:42 +03:00
Gold lost about 3% on Monday alone and touched $1809 at the start of trading on Tuesday.
Yesterday’s sell-off provided us with four medium-term bearish signals on the daily timeframes.
First, the daily candlestick completely absorbed Friday’s bullish momentum, clearly showing the strength of the bears.
![](https://fxpro.news/wp-content/uploads/2022/06/golddaily_220614.png)
Secondly, gold’s recovery stalled on the approach of the 50-day moving average. The strong reversal indicates that the medium-term trend remains bearish.
Third, in a decisive move, gold has moved below its 200-day moving average, a significant long-term trend signal that works well in gold. A consolidation below this line is a prologue to a further downtrend. Knowing this, investors often increase selling on such a signal, intensifying the fall in the coming days after a consolidation below this line.
Fourth, gold’s recovery this week stalled near the 61.8% Fibonacci retracement level from the April peak to the May low.
![](https://fxpro.news/wp-content/uploads/2022/06/goldweekly_220614.png)
Further near-term targets for the bears look like the $1790 area. If risk-off sentiments prevail in the global markets at those levels, gold may quickly return to the area of $1730-1770, where it found buyers’ support in the second half of last year.
If we move up to the weekly timeframes, a potential final sell-off is seen in the 200-week moving average at $1630, which is also a 50% retracement of the 2018-2020 rise triggered by the soft monetary policy.
The FxPro Analyst Team