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Published On: Wed, Sep 3rd, 2014

Fingers on the sell button: gold broke through its dynamic support!

Bullion slid to a 2.5-month low, breaching the dynamic support provided by the symmetrical triangle it had been trading in the entire 2014; considerable downside potential is unleashed.

Gold breached the dynamic support provided by the symmetrical triangle it had been trading in the entire 2014; considerable downside potential is unleashed.

Gold was knocked down to a 2.5-month low on Tuesday. As of 9:20 pm GMT, it was trading at $1265.70, spilling out of the symmetrical triangle it had been trading in for the last 8 months (see chart).

The break through the dynamic support connecting the lows since 31 December 2013 signals further losses for the precious metal. The immediate support for bullion is located at $1240, but it is not expected to halt the decline for long. The former support zone between $1272 and $1280 has now turned into a resistance.

As the breakout has already been confirmed on a daily basis, time is ripe for selling XAUUSD at levels $1263-$1275, with stop loss orders placed above $1297. Take profits should be slightly above the $1180 major support. A daily close below the latter level would signal that gold is in for a further slide.

 

This article expresses the opinion of Profitease.com, which is based on chart observations. It should not be taken as advice on buying or selling any financial instrument! Profitease.com does not accept any liability for losses or other damages endured as a result of using this article for trading purposes!

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