Gold has managed to record new all-time highs almost day after day as investors seek refuge on this precious metal amidst the ongoing global financial turmoil. Now having recently marked a high of $1,894.79 per ounce, will it continue to rise or will it at least consolidate or even correct in the mean time?
From a technical point of view, it appears that gold could be bound for a little consolidation or even some correction in the coming days. This is so because its recent ascent seems to be a bit steep which makes it somewhat unsustainable. Also, if you look at its daily chart, a bearish shooting star candlestick pattern can be spotted at its peak. Moreover, a presence of a regular bearish divergence where the price goes higher but the stochastics does not, suggests some technical weakness in its climb. On top of that, it also has been trading on an overbought condition for quite some time already. Given this, gold could possibly revisit its short term uptrend line before bouncing up again. Or if its present all-time high happens to be a reaction high then its possible for it to correct as well and fall to as low any of the three indicated Fibonacci retracement levels. However, a break above its present all-time high could invalidate all of these technical signals and push it to a higher level.
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