Gold Technical Analysis and Near-Term Outlook
Gold fell as called for after breaking lower out of a flat ascending triangle and took out the $1804.7 swing low. This invalidated the waves up from $1804.7 and has cleared the way for a test of $1779 tomorrow. This is the smaller than (0.618) target of the primary wave down from $1966.8. Therefore, once $1779 is met odds for an eventual decline to this wave’s $1717 equal to (1.00) target will increase to better than even in the coming weeks.
Furthermore, taking out $1779 will call for a move to challenge $1759. This is structurally the most important objective on the chart because it is the smaller than target of the primary wave down from $2107.6. Settling below this will call for a much firmer bearish outlook in the coming weeks and perhaps longer because the equal to target for this wave is $1631.
With that said, $1779 is currently the most confluent target on the chart. Therefore, from a near-term perspective, once $1779 is met a test of resistance is anticipated. Nevertheless, any move up from $1779 will most likely prove to be corrective of a larger decline and should hold $1817. Key near-term resistance is $1834, a close above which would call for $1856 and possibly higher.
This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ratio, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial
