Gold Price Forecast Talking Points:
- After a strong month of December held through the New Year, bears have awoken to re-take control of short-term Gold price action.
- Gold prices finished last week’s bar with a bearish engulfing pattern, often followed with the aim of continued bearish behavior.
- The analysis contained in article relies on price action and chart formations, along with focus on a couple of different bearish engulfing patterns. To learn more about price action or chart patterns, check out our DailyFX Education section.
Gold prices are starting 2021 on the move, but probably not in the manner that many had expected. As the US Dollar continues to pullback, Gold prices have been offered aggressively over the past few trading days as the yellow metal has pushed down to a fresh monthly low.
As looked at in this week’s technical forecast, the first weekly bar in Gold for 2021 printed as a bearish engulfing formation, which will often be approached with the aim of bearish continuation. This is similar to the formation that showed on the Daily chart back on August 7th, the same date that Gold set its current all-time-high. In that scenario, the bearish engulf highlighted the potential for the start of a pullback but, now five full months later Gold bulls remain subdued.
The bearish engulfing formation that printed last week brings on the prospect of fresh lows in Gold prices, with focus on the late-November swing around 1764.