Gold Price Forecast: Bearish MAs capping gains

referring to Gold's weekly chart is flashing long-term bear revival, i.e. the sell-off from the record high of $1,92.94 (September 2011 high) has resumed. The breakdown is accompanied by pick up in volatility from record low levels, Bollinger Band width indicates. ViewThe weekly chart shows a long-term bearish revival, so prices risk falling to/below $1,200 in the next six months. However, the bias would still remain bearish and only multiple weekly closes above the 10-week MA would abort the bearish view.

Gold Price Forecast: Bearish MAs capping gains

Gold's corrective rally gathered steam on Monda, but bearish moving averages (MA) are playing spoilsport. The hard currency seems to have bottomed out at $1,238 (July 3 low), but the descending (bearish) 5-week and 10-week MAs are complicating price recovery. Further, the 50-hour MA, 100-hour MA and 200-hour MA located one above the other, indicating the path of least resistance is on the higher side. Daily chartClearly, the odds are stacked in favor of a stronger corrective rally, however, the descending 5-week MA is proving a tough nut to crack. Weekly chartThe metal's failure to hold on to gains above the descending 5-week MA has only bolstered the bearish view put forward by the descending (bearish) 5-week MA and 10-week MA and has weakened the case for a stronger corrective rally.

Gold Price Forecast: Stronger corrective rally likely

as informed in Short-term bullish reversal signs are seen in the gold daily and weekly chart. Weekly chartCurrently, gold is reporting marginal week-on-week gains at $1,255, having clocked a high and low of $1,261 and $1,238 earlier this week. That said, the daily chart indicates the metal is more likely than not to close above $1,261 next week. ViewThe metal could see a stronger rally towards $1,270 next week and could close above $1,261 next Friday, confirming a bull reversal on the weekly chart. On the downside, acceptance below $1,238 (Tuesday's low) would kill the probability of a stronger corrective rally and would shift risk in favor of a drop towards $1,200.

collected by :kiven Dixter