Gold: Downside bias holds with limited follow-through – UOB

United Overseas Bank’s (UOB) Quek Ser Leang notes that spot gold remains under pressure after breaking an ascending trendline on 22 October and falling below $3,943 to a one-year low near $3,870 on 30 October. Strong downward momentum suggests further downside risk toward $3,700, although the bank sees a low probability of sustained losses below that level.

Gold extends decline toward $3,700

"While spot gold broke the trendline mentioned above on 22 October, there was little follow-through initially."

"Last Friday, however, it broke below $3,943 in a sharp move and dropped to a one-year low of $3,870."

"While the decline is entering oversold territory, strong downward momentum suggests there is scope for gold to decline further to $3,700."

"At this stage, the odds of a continued decline below $3,700 are not high."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)