Gold's shakeout may not be over

Last week in a video I expressed my concerns that the start-of-year gains were a bit suspect. So it is interest to see that a bearish engulfing day formed around a resistance cluster including a weekly VPOC and trendline from the record high.

Prices remain within a small symmetrical triangle on thew daily chart which could really break either way, but with such a strong bullish trend on the weekly, any retracement seems likely to be shallow. I also see gold hitting record highs this year.

For now, the leg lower from Friday's high appears to have formed in one way within the triangle, which implies at least one leg lower within it.

Bears could seek to fade into moves towards 2700 and target the HVN around 2646 or the lower trendline of the triangle.

Matt Simpson, Market Analyst at City Index and Forex.com