Gold could be on verge of a correction according to the daily doji formed on last day of 2018
- Gold prices dropped for the highest levels since June as the dollar firmed into the close.
- Gold futures were on track for a 1.9% 2018 decline.
Gold rallied to $1,284 on the last day of the year, but was met by bears cashing in on the highest levels since mid-summer 2018 which sent prices back to $1,278. On the whole, gold was heading for first annual decline since 2015. Gold futures, as measured by the most-active contract, were on track for a 1.9% 2018 decline.
Stocks steadied and dollar firmed
The price of gold slid with a bid in the greenback and steady stocks on Wall Street. Stocks, on the whole, however, are ending on a negative note, with the benchmarks in bear-market territory. The S&P 500 and Dow Jones Industrial Average are on track for losses that will mark their biggest decline since 2008 and the NASDAQ is on its knees also. In recent weeks, the weakness has started to benefit gold prices due to the heightened volatility in the greenback also as the Fed gets prices out. However, for the year, the DXY is up 4.4% but has dropped more than 1% in December, elevating gold prices.
The technicals lean bearish as the price moves through the pivot at 1279 with RSI turning south and a doji forming at the end of a long run of bullish daily candles which could be a warning to bulls that a correction is imminent. However, the 2018 50% Fibo level at 1262 was a key target which has been breached and may act as a firm support. 1287 is the 2018 61.8% Fibo. On the flipside, the 21-D SMA is now found down at 1250.
- Support levels: 1276 1271 1268
- Resistance levels: 1283 1287 1291