Time to deal with GOLD! Previously we wrote about this precious metal on the 11th of September and we were in the sideways trend waiting for a breakout. The reason why we are going to write about the XAU today, is that we finally got this breakout! This is what we wrote back then:
“Breakout of the neckline will be a legitimate signal to go short and abandon the bullish dream. On the other hand, breakout of the 23,6% Fibo, will be a positive sign and will set us a target on the next Fibo level – 38,2%. „
Traders chose to go down. The price broke the lower line of the triangle or if you will – the neckline of the head and shoulders formation. After the bounce from the 23,6% Fibo, that is a sell signal. Currently we are on the lowest levels since the middle of August. We can see that the bearish momentum is quite high and the breakout looks legitimate. Sell signal will be cancelled when the price will come back above the red line but that is less probable at the moment.