Gold Spot Price - MT4 Gold Chart Analysis

The gold spot price continued to move lower on Friday once again, ending the day and the week with a wide spread down candle which closed marginally below the 40 day moving average.  The last two weeks has seen a dramatic reversal in gold prices first triggered by the weekly chart which closed the previous trading week with a definitive shooting star candle clearly indicating a technical weakness in the recent gold bull trend.  This was duly confirmed by last week’s price action which closed on the weekly chart with a wide spread down bar but with Friday’s closing price finding some support from the 9 week moving average.  With the year end now approaching fast and with the recent resurgence of the US dollar now clearly evident we may see a further decline in the gold spot price in the short term.  Longer term the outlook remains bullish, however, for a resumption of the recent strong bull trend we now need to see a reversal signal on the weekly chart, preferably a long legged doji or deep hammer which will indicate that the market has absorbed the recent sell off.  With all three moving averages on the weekly gold chart still pointing firmly higher and with the 9 week average providing apparent support the outlook still remains positive although given the strength of the shooting star candle we need to wait for an equal and opposite reaction to indicate that the negative sentiment is now over.

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