Gold Backs Off; No Chart Damage…Yet

December gold futures on Tuesday saw a steep sell off on profit-taking pressure from recent strong gains and on a solid rebound in the value of the U.S. dollar versus the other major currencies. A steep uptrend line on the daily chart for December gold was penetrated on the downside and negated Tuesday, but no serious chart damage has yet occurred. However, strong follow-through selling pressure on Wednesday would likely begin to inflict some near-term technical damage to begin to suggest that a near-term market top is in place.

click on the chart to enlarge

Gold bears should also take note that the Moving Average Convergence Divergence (MACD) indicator, as seen at the bottom of the chart, is poised to produce a bearish line crossover signal, whereby the thick blue MACD line crosses below the thin red “trigger” line. See technical support and resistance levels on the chart.

Stay tuned!
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