Gold Price Forecast: Bears In Control, Eyes $1,240

This article originally appeared on FXStreet.

• A double top breakdown is seen on the weekly chart.
• Adds credence to repeated bull failure seen on the monthly chart.

Gold (XAU/USD) fell to $1,287 yesterday - the lowest level since late December, courtesy of the uptick in the treasury yields and the resulting rally in the US dollar.

The zero-yielding yellow metal could drop further to $1,240 in the near-term, the technical charts indicate.

Weekly chart

Chart Source: Netstation

Repeated bull failure pushed the yellow metal below $1,302 (double top neckline) as expected. A weekly close below the neckline looks like a done deal.

The relative strength index (RSI) is biased bearish  - below 50.00 and trending south in favor of the bears. Further, the 5-week moving average (MA) and 10-week MA are sloping downwards in favor of the bears.

So, the metal looks could slide to $1,240 - double top breakdown target as per the measured height method.

The bearish setup on the weekly chart only adds credence to the repeated bull failure seen in the monthly chart and the bearish breakdown in the monthly RSI

Monthly chart

Chart Source: Netstation

Gold bulls failed to cut through the triangle resistance and the 100-month moving average for four straight months before falling below $1,200. The RSI has breached the ascending triangle to the downside, signaling a bull-to-bear trend change.

Thus, prices could slide to triangle support seen at $1,230 in the next few months.

Only a convincing break above the 100-month MA, currently seen at $1,352, would revive the bullish outlook.