Gold can Correct Lower Now

The yellow metal, gold (XAU/USD), and other precious metals continue to show follow through and strength after the Brexit vote saw the United Kingdom voting to leave the European Union (EU). Right now, the European Parliament is convening a special session to produce an official response to the Brexit. The EU heads of state are now gathering in Brussels for a special two day European Council meeting to discuss how to proceed with finalizing the EU divorce from the UK.

However, concrete specifics from this first meeting are not very likely. Article 50, which handles this specific issue, has yet to be invoked and has never been used before. This means official exit procedures have yet to start. This meeting will focus on what German Chancellor Angela Merkel has dubbed the “new impulse” for the EU.

Gold Technical Analysis

Let’s discuss today’s gold (XAU/USD) daily technical analysis. The price of gold has rebounded, after forming its first bullish chart formation and with the Brexit. Now there is a possible bearish chart formation in the works, as an unconfirmed shooting star candlestick has formed. Should this confirm, with a daily close below the near term technical support level of 1308.11, then more losses are ahead for the yellow metal. The next technical support barrier lines up at 1294.45. The alternative technical analysis, should the yellow metal recover, notes the first upside barrier at 1321.80. The next technical resistance level lines up at 1338.71.