Gold technical analysis: Flatlined in Asia despite flag breakout

Gold’s hourly chart shows a bull flag breakout.
Daily chart shows buyer exhaustion.

Omkar Godbole FXStreet Contributor

Gold is struggling to shine this Thursday morning in Asia despite the bullish technical setup on short duration chart.

The yellow metal’s hourly chart shows a bull flag breakout – a continuation pattern which often accelerates the preceding bullish move.

Even so, gold is trading largely unchanged on the day at $1,418.

The metal’s inability to rally despite the flag breakout on the hourly chart validates the signs of buyer exhaustion on the daily chart.

The safe haven metal spiked to $1,438 levels in the Asian trading hours yesterday only to end the day with moderate losses at $1,419. Essentially, the metal created a candle with a long upper shadow. A similar candle was created on June 25 as well.

As a result, the yellow metal looks set to retest the psychological support of $1,400. That said, a bearish reversal would be confirmed only if the price drops below $1,382, confirming a double top breakdown.

Hourly chart

Daily chart

Trend: Pullback to $1,400 likely

Pivot points

1. R3 1456.18
2. R2 1446.19
3. R1 1432.48
PP 1422.49
1. S1 1408.78
2. S2 1398.79
3. S3 1385.08

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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