Gold technical analysis: Gravestone Doji indicates scope for a deeper pullback

• Gold is looking heavy, having created a Gravestone Doji candle on Monday.
• The metal failed to close above $1,535 on Monday, a sign of buyer exhaustion.

Gold could fall back to $1,500 in the short-term, as the daily chart is reporting a topping pattern.

The yellow metal created a Gravestone Doji on Monday, which occurs when the open, low, and closing prices are all near each other with a long upper shadow. (Prices rose to a high of $1,555 before closing on a flat note at $1,527).

Gravestone Doji is widely considered an advance warning of an impending bearish reversal, especially if it appears following a notable rally. In Gold’s case, the Gravestone Doji has appeared following a solid rise from $1,270 (May 21 low) to $1,555.

Also, the metal failed to close above the previous higher high of $1,535 (Aug. 13 high) on Monday, which indicates buyer exhaustion.

As a result, a deeper correction to $1,500 could be in the offing. As of writing, Gold is changing hands at $1,528 per Oz.

Daily chart

Trend: Bearish

Pivot points