Gold was losing its upward momentum with a rising wedge formation and now it could be on the brink of a break. Banking fears eased a bit more in the recent week. FED backstop programs used less, no immediate banking failures and now bank earnings have started to come. Bank earnings have also started to come in, which could further ease fears and have a bearish effect on gold if there will be no surprises.
Last week, the price of gold came close to the strong resistance level of 2075, falling short by only $25. This resistance has put pressure on the price and triggered some profit-taking actions. Now that the price has fallen below the short-term rising wedge formation, there could be an increase in selling pressure if gold continues to hold below 2000. A potential pivot point to watch for a downward move trigger is 1985, which could lead down to the middle point of the March-April surge, near 1929.
However, if bulls recapture and hold 2000, the current bearish outlook may fail and gold could make another attempt towards the north.
