Gold Technical Analysis and Near-Term Outlook
The near-term outlook for gold is bearish after finally breaking lower out of a coil pattern and settling below the pattern’s lower trend line. Gold also settled below the 20-day moving average. The move down is now poised to reach at least $1929. This is the smaller than (0.618) target of the wave down from $2001.2 and connects to a key objective at $1892 as the equal to (1.00) target. The $1892 objective is also the smaller than target of the primary wave down from $2089.2. Settling below this would be quite bearish for the outlook in the coming weeks.
Nevertheless, a move up at the end of the day suggests gold might test the lower trend line of the coil before the decline continues. Tomorrow, this trend line will intersect with $1964 resistance and is expected to hold. Rising above this would call for another attempt at $1983, the smaller than target of the wave up from $1911.7. Settling above $1983 would imply that today’s move down was another false breakout and would clear the way for $2005 and likely 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 ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.