Gold Holds Uptrend Channel as Sellers Test Momentum

Gold momentum has shifted to sellers, with futures down 5.6% from last week’s highs and showing multiple bearish signals.

Technically, the sell-off has been controlled, not aggressive. Gold is still moving in a slight uptrending channel. It will keep moving in this channel as long as it stays above this level, which is shown in the graph. The level is 4690.

This level will shift upward as the channel moves upward. A break below this lower line of the channel will confirm aggressive bearish movement. But if gold stays in this channel and if the harmony of downward retracement shown by red lines inside the channel stays, it can keep moving in this channel, and it can be traded in a classical approach of trading an upward channel, which is very simple: you have to buy at the lower border of the channel and close in the middle of the channel.

XAU/USD Daily Chart