Wednesday's Market Minute: Gold Struggles Near Long-Term Support

Few of the charts for major futures products have looked worse than Gold recently. The yellow metal is down about 19% from its August highs, with price action forming a steady grind downward for months. Much of the recent technical activity for /GC has leaned toward bearishness, including the MACD forming a bearish crossover that likely will complete today; a bearish PSAR crossover earlier this week; the ADX rising from a trough amid a downtrend, which suggests strengthening directionality; and price failing to break above the 21-day Exponential Moving Average after flirting with it almost every day since Mar. 17. None of these are encouraging signs for bulls, but there’s still one important threshold to the downside that hasn’t been breached yet. The 1670 level represents the confluence of the yearly two-Standard Deviation Channel’s lower line as well as a frequent bottoming point for Gold during the past year. If /GC recovers and starts an upward run, keep an eye on resistance at not only the 21-EMA, but also near the 1765 level as this area has often been a point of both support and resistance during the previous year. Beyond that, the confluence of the 64-EMA and 252-EMA near 1778 would be the next major hurdle to clear.