Gold has now turned technically bearish for the first-time since December 2018, after sellers breached the metal’s key 200-day moving average.
Gold price technical analysis shows that the metal could fall towards the $1,380 technical area, which would form a huge head and shoulders pattern on the daily time frame.
Gold medium-term price trend
Metals have been coming under heavy downside pressure over recent days as traders and investors liquidate positions and move into cash.
Gold recently suffered its worst one-day decline since 2013, highlighting the fact that a major top may now be in place for the yellow-metal.
Gold technical analysis shows that price is now trading below its 200-day moving average, placing the yellow-metal into a bear market.
The daily time frame shows that a large head and shoulders pattern with over $300.00 of downside potential will form if price moves towards the $1,380 level.
A breakout below the technically important $1,430 level should confirm bears’ intention to test below the $1,400 support level.
Gold short-term price trend
Gold price remains technically bearish over the short-term while price trades below the $1,600 resistance level.
The yellow metal recently invalidated a bullish inverted head and shoulder pattern, with the bearish breakout now in play.
Gold technical analysis over the short term shows that the bearish breakout is valid while price trades below the $1,560 level.
The bearish target of the invalidated inverted head and shoulders pattern is located around the $1,410 level.
Traders should expect technical selling to increase if price starts to break below the $1,440 support level this week.
Gold technical summary
Gold technical analysis shows that a bearish breakout has occurred on the lower time frames. The higher time frames also show that a drop towards the $1,380 level may be on the horizon.