Traders Report: Gold Price Falls
Gold prices suffered heavy losses overnight and fell to its lowest level in close to four months. Safe haven investor appetite has diminished with signs of US economic improvement and a more politically stable Ukcarine causing money to flow out from safe haven commodities such as Gold and Silver.
The chart below shows the price of Gold forming a symmetrical triangle over the past 3 months. The lower support trend-line was breached yesterday with a domminant bearish candle showing strength in the bears conviction to drop prices.
After such a strong move down it is possible that the price may steady and retrace back up towards the bottom trend-line which would then be expected to act as resistance. I see this area as being a good place to consider a short position.
In this situation I will sit on the sidelines and wait for an appropriate signal to trigger a short trade such as a bearish candle stick pattern at the resistance level to indicate that bears have re-gained control to push the price lower.