The price of gold extended downside movement on Wednesday, dragging the precious metal’s value to less than $1195 ahead of key economic releases. The technical bias however remains bullish due to a Higher High in the recent upside rally. The bearish pin bar which emerged on Monday is constantly keeping precious metal under selling pressure.
Technical Analysis
As of this writing, the precious metal is being traded near $1191. A hurdle can be seen around $1198, the 38.2% fib level ahead of $1211, the 23.6% fib level and then $1232, the swing high of the last major upside move as demonstrated in the following daily chart.
On the downside, the yellow metal is likely to find a support around $1187, the 61.8% fib level ahead of $1164, the 76.4% fib level and then $1143, the low of the last major dip. The technical bias will remain bullish as long as the $1170 support area is intact.
US Trade Balance
The trade deficit of the United States remained 44 billion USD in April as compared to 51.40 billion USD in the month before, the median projection of different economists says. The actual figure will be released today during the early New York session. Generally speaking, lower trade deficit reading is considered positive for the US economy and vice versa so a better than expected actual outcome will be seen as bearish for Gold.
Trade Idea
Considering the overall technical and fundamental outlook specially the bearish pin bar which emerged on Monday, selling the precious metal around current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the Monday’s bearish pin bar as described above.
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