Falling Wedge Continuation Pattern on Gold


05-06-2018 10:40 AM

Gold prices traded almost flat on Monday as a Federal Reserve interest rate hike likely next week kept a cover on upside in the precious metal regardless of worries of a U.S.-China trade war at the bottom of safe-haven demand.

Traders weighed the outlook of further rate hikes against the return of safe-haven demand as U.S.-China trade discussions over the weekend yielded limited progress, raising the outlook of a trade war.

Expectations among traders that the Federal Reserve would hike rates for the second time this year, reducing demand for the yellow metal was on the air. The dollar's bounce backsession lows also kept a cover on an advance in gold.

Technical chart


Technical outlook

Gold prices were unable to break above support line wherein “Falling Wedge pattern” is on a daily chart. Gold prices continue with a little downside pressure for the reason that as per the pattern indication, there will be a second attempt to hit resistance line which is a bearish indication. Gold prices consolidate around resistance area. Further analysis can be made, if it breaks above $1305 then it would turn bullish towards $1315-1325. Alternatively, if it is unable to break above, then selling pressure would push to negative side towards $1290-1275 level.