At the start of the European trading session on Friday (December 20, 2024), gold prices remained relatively stable, showing no significant changes in the key technical levels to be monitored.
On the 1-hour chart, gold is observed to be trading below a trendline that has been in place since December 12. As long as the price remains beneath this trendline, there is a likelihood of a continued downward trend.
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The $2,620 per troy ounce mark acts as a substantial resistance level. Historically, this price point has often served as a support zone, preventing further declines in the gold price. Since it was breached last Wednesday, gold has struggled to reclaim this level, making it a strong case of resistance after previously being support.
The Stochastic indicator has begun to decline after reaching the overbought territory, increasing the chances for a further fall.
On the 15-minute chart, the Stochastic indicator is currently trending upward, entering the overbought area. Should gold rise on this timeframe, it would create a favorable selling opportunity with an advantageous risk-reward ratio. This scenario arises because when the Stochastic remains in the overbought zone for an extended period, there is a high likelihood that prices will reverse downwards, especially considering that the trend on the 1-hour timeframe is still negative.
As long as gold remains below $2,620, it could potentially drop to around $2,588. If this level is breached, the next target for a decline could be $2,580.
Technical Reference: Sell while below $2,620
Potential Take Profit 1: $2,588
Potential Take Profit 2: $2,580
Potential Stop Loss 1: $2,620
Potential Stop Loss 2: $2,629
