- Gold created a bearish outside day candlestick pattern on Tuesday.
- The daily chart indicators are flashing bearish conditions.
- The yellow metal may face selling pressure and drop to $1,460 in the short term.
Gold risks falling to recent lows near $1,460, having carved out a bearish outside day candlestick pattern on Tuesday.
A bearish outside day occurs when prices end the day on a negative note, engulfing preceding day’s price action. The candlestick indicates impending bearish reversal when it appears after a notable price rise.
In Gold’s case, it indicates the continuation of the pullback from Oct. 10’s high of $1,517.
The bearish candlestick is backed by a below-50 reading on the relative strength index. The MACD has breached the ascending trendline below the zero line – a sign of strengthening bearish momentum.
All-in-all, the path of least resistance appears to be on the downside. On the way lower, key support levels are located at $1,474 (Oct. 11 low) and $1,459 (Oct. 1 low).
The bearish case will be invalidated if the metal closes Wednesday above the bearish outside day’s high of $1,499. As of writing, the yellow metal is trading at $1,482 per Oz.
Daily chart
Trend: Bearish
Technical levels
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