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Gold Broke a Trendline and Formed a Double Top

Gold rallied from almost the 2013-2014 low around 1180, up to 1237.44 by the 10/13 session. As we enter the 10/15 Asian session, price failed to clear above the previous high, forming a double top as it fell to 1225. Note that price also broke below a rising trendline and the 100-, and 50-hour simple moving averages (SMAs). The 1H RSI also fell below 30 showing bearish momentum, though in the near-term it shows a bit of an oversold condition.

Gold (XAU/USD) 10/15 1H Chart


(click to enlarge)

Note if price can hold below the 1232 area the double top should be legit. To the downside, we should note a common support just below 1205. In the 1H chart we can see this support act during the 10/7 and 10/8 session. 

Gold (XAU/USD) 10/15 4H Chart

(click to enlarge)

In the 4H chart below, we can see that the 1205-1210 area is indeed support going back to late September. This will be a key level. If price does fall from the double top, this will be like the last line of defense for the bulls. A hold above this area suggests further consolidation/bullish correction. A break below 1200 makes it more likely that gold is continuing its downtrend and test the 2013-2014 lows around 1180 again.