Gold futures slipped lower after a failed retest of key level resistance in last week's trading. The resistance at $1,690 per ounce, highlighted by the Autochartist Key Level indicator, has now established itself as significant overhead which may prove difficult to overcome in the near term.

The breakdown from the key level also triggered a technical breakout from a large Pennant chart pattern, shown here on the Autochartist platform's 240-minute time interval. This adds support to the case for continued selling pressure in the week ahead.

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Gold has been buffeted by several conflicting forces in the broader markets over the last several weeks. The unfolding Euro zone debt crisis is raising concerns among investors as to the safety of holding paper assets in the face of potential sovereign defaults. The reaction has so far been heavy selling in the equities markets, with US Treasuries benefitting from their perception as a safe-haven. Gold is viewed a viable defensive asset as well, however it is prone to weakness whenever a threat of economic slowdown drags down the commodities complex. This pressure is counterbalancing gold's otherwise bullish flight from paper investments.

The chart analysis arising from these opposing concerns reveals the Pennant formation which defines the wide trading range between $1,670 and $1,710 per ounce. The key level resistance represents the mid-point of the pennant, with traders using the level as a pivot point to establish long or short positions.

While the potential remains high for much higher prices in the long term, the chart will need to overcome the $1,690 resistance to confirm the lows have been achieved. The breakdown below the pennant support after the last move through this pivot point leaves gold poised for a slide to new lows for the month. If the selling pressure carries over from last week, the projected price range places gold between $1,634 and $1,658 per ounce.
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