The six-month chart of the gold price has shown a sideways movement since April, which met the rising 100-day line in the summer. After several contacts failed to break the 100 line significantly downwards, a massive increase began instead in mid-August, which recently almost reached the USD 4,400 mark twice – a classic double top. The blue neckline of this formation can be derived well at approx. USD 4,000.
According to chart theory, if the neckline is significantly undershot, a price target in the region of USD 3,600 would be activated (the previous vertical extension plotted downwards). This would mean that the gold price would be back in the area of the 100-day line, which was already able to act as support before.
A further decline is indicated by the historically high percentage distance of the gold price, in particular from the 200-day line, as well as the sell signals from the MACD and stochastic indicator (blue line crossed the red line downwards).
On the other hand, the round mark of USD 4,000 certainly represents strong support. In the case of the indicators, the stochastic has already come close to the previous low points and the overbought/oversold indicator is already close to the previous low and turning points.
