Gold Price Analysis: Potential head-and-shoulders on the daily line chart
- Gold is creating a bearish reversal pattern on the daily chart.
- A close below $1,555 is needed to confirm the trend change.
Gold seems to be charting a head-and-shoulders bearish reversal pattern on the daily line chart.
A close below the neckline support at $1,555 would confirm breakdown and open the doors to $1,521 (target as per the measured move method).
At press time, the yellow metal is sidelined at $1,567. The prospects of gold completing a head-and-shoulders pattern would weaken if prices close above the Feb. 10 high of $1,572. That will likely fuel a re-test of levels above $1,580.
The downtrend on the 14-day relative strength index indicates the metal is likely to fall toward the neckline support at $1,555.