Gold Technical Analysis and Near-Term Outlook
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Gold initially fell to test and hold $3325 as suspected. However, the bounce up from $3325.4 stalled at $3375.7, and prices fell to test the larger than (1.618) target of the wave down from $3348.2 and the 62 percent retracement of the rise from $3209.4 at $3296. This important level held on a closing basis, but the move up from $3293.3 has been minimal so far. This is an ideal stalling point should the pullback from $3448.2 prove to be a short-lived correction.
That said, today’s close below the 20-day moving average and the minimal move up from $3293.3 suggest that a test of $3263 will take place ahead of the weekend. This is a bearish decision point because it is the smaller than (0.618) target of the wave down from $3509.9. Settling below $3263 will call for an extended correction to challenge $3200, and then this wave’s $3148 equal to (1.00) target.
Nevertheless, should prices rally after holding $3296 on a closing basis and overcome $3358, look for a test of $3392. Settling above $3392 will imply that the pullback from $3448.2 is complete. Even so, at this point, gold must settle above the $3441 smaller than target of the wave up from $3209.4 to establish a firm bullish outlook that targets $3538 and higher.
