Gold price is unable to climb back above $2,000, but it surely finds bids on every dip lower. So far, it bounced from the $1740 lows and came close to the $1,900, in what seems to be an inversed head and shoulders pattern.
Such a formation is a reversal one and needs some more consolidation on the right shoulder. Because the Christmas holidays are close and the end of the trading year too, the chances are that the gold price will consolidate between the upper and lower edges of the channel seen below.
Two main events remain on the table, though, and they may trigger some movement in gold too. One is Brexit – still undecided, with ongoing negotiations undergoing. The other is the pandemic and its effect on the U.S. stock market. If the stocks correct from their highs, the higher USD may spill over to gold too.
Gold Price Technical Analysis
Whenever the market dips and quickly comes back to the breakout level, we should suspect the head of a head and shoulders. In this case, because the pattern forms at the end of a bearish trend, it signals reversal potential.
Out of the two possibilities to trade the channel, traders might want to focus on the long side, with quick profit-taking by the time the price reaches the upper edge.
Gold Price Forecast
