Gold Technical Analysis and Near-Term Outlook
The near-term outlook for gold continues to lean bearish, but the call remains tight. Today’s initial move up to $1744.8 broke the upper trend line of a coil pattern. However, the move up stalled and the subsequent decline broke the coil’s lower trend line before stalling at $1720. This was in line with the equal to (1.00) target of the wave down from $1747, the 38 percent retracement from $1673.3, and the 20-day moving average.
There is little doubt that the move up from $1673.3 is corrective of the larger-scale decline, which still targets $1631. Closing below $1720 will confirm a break lower and call for a test of a crucial target around $1707. Settling below this would strongly imply that the corrective move up is complete and call for a decline to $1684 and lower.
That said, while the $1696.6 swing low holds, the primary wave up from $1673.3 will retain a reasonable chance to reach its $1761 equal to target. Therefore, should gold rally again ahead of the weekend and settle above $1739 a break higher will be confirmed. This will clear the way for $1752 and then $1761. In this case, $1761 is expected to hold. Closing above this will call for a more significant test of resistance before the decline continues as expected.
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