Gold has been ‘Trumped’, here are the downside targets

The US election is not as scary as some gold bugs imagined. After a fall, and rebound rally, the gold price resumed its downtrend. Weeks ago we asked who stole the gold? Now we know the answer.

We re-assess the extent of the damage and the now limited potential for recovery.

We start with damage assessment. The fall below the historical resistance and support level near $1,290 is critical.

The rally was a dead cat bounce, and yes, we were caught on the wrong side of it.

The uptrend with gold was well defined using a Guppy Multiple Moving Average (GMMA) indicator. The long-term GMMA was well separated and this generally shows strong buying support from investors. The upper edge of the long-term GMMA was a little above the historical support level near $1,290. The first fall below the upper edge of the long-term GMMA was a warning. The second fall below this level is a decisive change in the direction of the trend. It cannot be ignored.

A continued fall below the edge of the long-term GMMA has support near $1,180. This is the current downside target. Failure to hold at this support level sets a target near $1,050.