Gold starts a bearish correction
Joe Biden has been announced as the winner of the U.S election today. The market slightly moving positive but not much as the situation already priced in. Gold prices also moving slightly higher at $1,840. The bull might expect less in gold prices as the precious metal battered last month with a drop from $1,876 to $1,776.
If the bearish pressure continues to mount on gold prices then traders will expect further correction toward $1,500 – $1,550. Under the current situation, it is better to let the gold price to continue its bearish correction and enter long positions at a lower level.
New Month
Monthly Chart
Gold bearish correction resume last month as the precious metal continues printed a bearish close. The price moving away from $2,000 then $1,900 and testing the $1,800 level this month. We still think the bearish correction will continue and the price will target the bottom of the channel also the $1,500 – $1,550 level.
The overall trend of gold is bullish for the long-term which means traders will continue waiting for a deeper pullback to enter long positions.
Weekly Chart
Lower low keep printed on the gold weekly chart. Recently, the price tested the trendline and show a bounce reaction. Similar to the monthly view, we think the price will continue its bearish correction and make a deeper bearish movement to target the $1,500 – $1,550 area.
Daily Chart
Gold prices tested the bottom of the channel shown on the daily chart and provide traders with a bullish bounce. The bounce has reached the middle of the channel range and might extend toward the top of the channel. No change to the outlook which is bearish inside the channel for now.
Trade Plan
Gold’s long-term trend is bullish but the price currently undergoes bearish correction on the short-term chart. If the bearish pressure continues to mount then gold might continue lower to target the $1,500 – $1,550 area. At the current time, traders will monitor the price reaction inside the bearish channel on the daily chart.