Gold Price Forecast – September 24, 2020

Author: Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

Gold Technical Analysis and Near-Term Outlook

The outlook for December COMEX gold is bearish after breaking lower out of a coil pattern last week and settling below a crucial $1888 objective on Wednesday. The sustained close below $1888, the smaller than (0.618) target of the primary wave down from $2089.2, calls for gold to reach the $1810 equal to (1.00) target in the coming days.

Gold - $15 Kase Bar Chart
Gold – $15 Kase Bar Chart

However, there is strong near-term support around $1843. This is the most confluent wave projection and is in line with the 38 percent retracement of the move up from $1458.8. Today’s formation of a hammer also suggests that a larger test of resistance might take place before the decline continues.

The $1888 level has become initial resistance and will likely hold. However, the increase in volatility during the past few days could help drive gold to challenge $1905. These are the completion and confirmation points for today’s hammer pattern, respectively. Settling above $1905 is doubtful but would dampen odds for a continued decline during the next few days and would shift near-term odds in favor of challenging $1930 and possibly $1954.

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.

Natural Gas Technical Analysis and Near-Term Outlook

October natural gas finally rallied after holding support around $1.82. The prompt month’s move up should be bolstered by rising winter prices and a bullish shift in near-term external factors.

October settled below $2.16, the 38 percent retracement of the decline from $2.743 and the XC (2.764) projection. This objective was also in line with October’s 100- and 200-day moving averages. Nevertheless, the post-settlement rise to $2.207 implies that near-term sentiment remains bullish headed into tomorrow.

Natural Gas - $0.03 Kase Bar Chart
Natural Gas – $0.03 Kase Bar Chart

The next major objectives for October natural gas are $2.27 and $2.38. The $2.27 target is the 50 percent retracement from $2.743 and 50-day moving average. The $2.38 target is the 62 percent retracement. Settling above $2.38 will call for $2.44, the smaller than (0.618) target of the wave up from $1.70 that connects to $2.84 and higher.

The challenge for tomorrow is that the wave formation up from $1.795 does not project any higher than $2.22. This is the trend terminus for that wave and the move up from $1.808 lacks a clear wave structure. Therefore, there is a good chance for a test of support before prices rise much higher.

There is immediate support at $2.11 but given the increase in volatility, a test of $2.05 is probable. Key support is $1.99. This is the 50 percent retracement of the rise from $1.795 and today’s midpoint. Closing below $1.99 would call for $1.95 and $1.84, the latter of which is the barrier to an unlikely bearish outlook in the coming weeks.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Technical Analysis and Short-Term Forecast

The near-term outlook for November WTI crude oil leans bullish after holding the 100-day moving average for the second straight day and holding the 50 percent retracement of the rise from $36.58 on a closing basis. This is a tight call though, and today’s long-legged doji reflects uncertainty headed into tomorrow.

Nevertheless, the wave formation up from $38.87 is poised to test its $40.1 smaller than (0.618) target. This then connects to a key objective at $40.6 as the equal to (1.00) target. The $40.6 objective is also the 62 percent retracement of the decline from $41.72. Settling above $40.6 will clear the way for $41.2 and then $42.1. The $42.1 objective is most important because this is the smaller than target of the primary wave up from $36.58. Settling above $42.1 will put odds firmly in favor of higher prices.

WTI Crude Oil - $0.35 Kase Bar Chart
WTI Crude Oil – $0.35 Kase Bar Chart

With that said, the late move up from $39.19 stalled near the 62 percent retracement of the decline from $40.27. Also, the choppy nature of today’s move up from $38.87 implies that today’s price action might be corrective of the move down from $41.72. Should WTI fall below $39.1, look for a test of crucial support at $38.5. This is the smaller than target of the primary wave down from $41.72 and the 62 percent retracement of the rise from $36.58. Settling below this will significantly dampen odds for a continued rise and would call for key near-term support at $37.2. This is in line with the smaller than target of the primary wave down from $44.05. Settling below $37.2 would confirm a bearish outlook for WTI in the coming weeks.

Brent Crude Oil Technical Analysis and Short-Term Forecast

Brent crude oil settled below the 100-day moving average for the second straight day. This was bearish for the outlook, but today’s long-legged doji reflects uncertainty after Monday’s decline. Also, the 62 percent retracement of the rise from $39.3 at $41.0 has held and the wave up from $40.96 is poised to challenge its $42.0 smaller than (0.618) target. Rising above this will call for $42.5, which then connects to $43.2 and higher.

Conversely, the move up from $40.96 has been rather choppy and may prove to be a correction. Should Brent take out $41.0 look for a test of $40.3. Settling below $40.3 would call for another test of key support and the barrier to a longer-term bearish outlook at $39.3.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

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.

Gold - Daily Coil
Gold – Daily Coil

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.

Natural Gas Technical Analysis and Near-Term Outlook

The near-term outlook for natural gas has shifted back to being firmly bearish. Yesterday’s move up proved to be another pullback to challenge the neckline of the complex head and shoulders. Also, natural gas settled below the crucial $2.28 objective and fell toward another important target at $2.22 after the settlement.

The $2.22 target is the 50 percent retracement of the rise from $1.700 and a confluent wave projection. There is also a target at $2.19 that has increased in importance during the past few days. This area between $2.19 and $2.22 may prove to be a stalling point. Even so, any move up from this area will most likely prove to be a short-lived correction and is expected to hold $2.31.

Natural Gas - $0.035 Kase Bar Chart
Natural Gas – $0.035 Kase Bar Chart

Now that natural gas has taken out the $2.28 equal to (1.00) target the primary wave down from $2.743, the decline is poised to extend to the $2.15 intermediate (1.382) target and then the $2.10 larger than (1.618) target. The $2.10 target is crucial and is the most likely stalling point for the decline from $2.743 because this is also the 62 percent retracement of the move up from $1.700 and the complex head and shoulders’ target.

The 50-day moving average held on a closing basis today, but prices have already moved below that level after the settlement. Otherwise, there are no signals or patterns that call for the move down to end. As stated earlier, resistance at $2.31 is expected to hold and $2.35 is key for the near-term. Settling above $2.35 will call for another attempt at $2.43 and higher.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Technical Analysis and Short-Term Forecast

WTI crude oil broke higher out of an intra-day coil pattern (dark blue dotted lines) and settled the day above the $38.1 smaller than (0.618) target of the primary wave up from $36.13 (red). The $38.1 level was also the midpoint of the September 8 candlestick. This was positive for the near-term outlook and calls for a test of $39.0 tomorrow. However, $39.0 will likely hold.

The $39.0 objective is extremely important for the near-term outlook because it is the equal to (1.00) target of the primary wave up from $36.13 (red) and the 38 percent retracement of the decline from $43.78 (pink). Settling above this would warn that the recent move down might already be complete and would call for a test of $40.0 and higher.

WTI Crude Oil - $0.35 Kase Bar Chart
WTI Crude Oil – $0.35 Kase Bar Chart

Nevertheless, aside from today’s move up, the rise from $36.13 has been extremely shallow and choppy. Therefore, this move is most likely corrective. Additionally, the move up from $36.13 could form a bearish flag pattern if $39.0 holds. This is because a trend line parallel to the lower trend line of the coil (gray dotted line) will intersect with $39.0 tomorrow.

Once $39.0 is met, odds for a test of $37.6 will increase. Holding $39.0 and settling below $37.6 will confirm that a flag is forming and will call for a test of $37.1. This is currently the 62 percent retracement of the rise from $36.13 and is in line with the potential flag’s lower trend line. Settling below $37.1 will call for another test of $36.0.

Granted, $36.0 was and still is, major support for the longer-term outlook. Therefore, the move down might be complete. However, the fate of WTI’s near-term outlook will be determined by holding or closing above $39.0 tomorrow.

Brent Crude Oil Technical Analysis and Short-Term Forecast

Brent formed a double bottom around $39.3 that will be confirmed by a close above the $41.20 swing high. The target of the double bottom is $43.1. Based on the waves up from $39.30, Brent should rise to $41.3 tomorrow. However, an immediate close above this (and the $41.20 swing high) will likely be a challenge because $41.3 is the 100-day moving average.

Once $41.3 is met, odds for a test of $39.9 will rise. Settling below $39.9 would imply that a rectangle pattern is forming instead of a double bottom. This pattern would be bearish for the outlook rather than bullish. In this case, odds would shift in favor of testing $39.3, a close below which would call for the move down from $46.61 to continue.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Technical Analysis and Near-Term Outlook

Gold is trading in a narrowing range that forms a coil pattern. Coils are not exceptionally reliable patterns like flags and pennants when it comes to determining a breakout direction. However, they lean in favor of a breakout in the direction of the prior move before the coil formed, in this case, down. A breakout of the coil should take place during the next few days.

Coils reflect uncertainty, which makes this is a very tight near-term call for gold right now. Even so, odds continue to lean in favor of a break lower. Falling below $1936 will call for $1820. This is the smaller than target of the wave down from $2001.2. Settling below this will confirm a break lower out of the coil and call for a test of $1888 and likely lower.

Gold - Coil on $15 Kase Bar Chart
Gold – Coil on $15 Kase Bar Chart

Nevertheless, gold briefly broke the coil’s lower trend line on Tuesday, but since then has challenged the 62 percent retracement of the decline from $2001.2 and the smaller than (0.618) target of the wave up from $1908.4. Prices also settled above the 20-day moving average today. These factors suggest the coil’s upper trend line around $1988 might be challenged before another test of support. Also, the wave up from $1908.4 calls for a test of $2002. Settling above $2002 would confirm a break higher out of the coil and clear the way for $2023 and likely $2041.

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

Natural Gas Near-Term Technical Analysis and Outlook

The near-term outlook for natural gas remains bearish after challenging support at $2.34 when prices fell to $2.328 today. This is a relatively important area of support because it is the intermediate (1.382) target of the first wave down from $2.743 and the 38 percent retracement of the rise from $1.700. Even so, the subsequent move up from $2.328 forms a bearish pennant that should break lower tomorrow.

Natural Gas - Complex Head and Shoulders on $0.035 Kase Bar Chart
Natural Gas – Complex Head and Shoulders on $0.035 Kase Bar Chart

Closing below $2.33 (adjusted from $2.34) will clear the way for $2.28. This is another potential stalling point because it is the larger than (1.618) target of the first wave down from $2.743 and the equal to (1.00) target of the primary wave down from $2.743. As discussed in yesterday’s update, settling below $2.28 might initially be a challenge, but odds for this are increasing.

The one caveat headed into tomorrow is that natural gas has not settled below the $2.40 neckline of the complex head and shoulders pattern. Prices settled at exactly $2.40 yesterday and $2.406 today. This is not too concerning but is something to watch during the next few days. Should natural gas rise above $2.45, look for a test of $2.50. This level is expected to hold. Key resistance and the barrier to a bullish near-term outlook is $2.60.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Short-Term Price Forecast

WTI crude oil fell as called for in this week’s Kase Commentary on Crude Oil but has reached the crucial $36.0 objective much faster than anticipated. The $36.0 objective is split between the $36.11 larger than (1.618) target of the primary wave down from $43.78 and the $35.94 38 percent retracement of the rise from $23.26. Meeting this objective so quickly signals that a much deeper test of support than previously expected may unfold. However, because the move down stalled at $36.13 today, a test of resistance is expected first.

WTI Crude Oil – $0.35 Kase Bar Chart

Based on the small wave up from $36.13, WTI should rise to at least $37.4 and likely $38.1 early tomorrow. These are the equal to (1.00) and larger than targets, respectively. The $38.1 level is also today’s midpoint and is expected to hold. Rising above this will call for key resistance at $39.4. This is the highest the wave up from $36.13 projects and is near today’s open. Closing above $39.4 is doubtful but would call for $40.0 and possibly higher and signal that the corrective move down might already be complete.

Once $37.4 is met, odds for another test of support around $35.9 will increase. Falling below $36.36 will invalidate the wave up from $36.13 that calls for $37.34 and higher. This would also call for a test of $35.9, a close below which will clear the way for $35.0 and lower.

Brent Crude Oil Short-Term Price Forecast

Brent fell as expected but has challenged the $39.1 objective sooner than predicted. Nonetheless, odds favor a continued decline and a move below $39.4 will call for $38.8 and lower.

That said, the move down stalled just above the crucial $39.1 area and the wave up from $39.31 implies that a test of $40.3 and probably $40.9 will take place first. Resistance at $40.9 is expected to hold. Key Resistance is $42.1, a close above which will clear the way for $43.0 and higher.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Technical Analysis and Near-Term Outlook

Gold is trading in a narrowing range that forms a coil pattern. Coils reflect indecisiveness and are not the most reliable patterns. Even so, they generally break in the direction of the prior move, in this case, down.

Gold - Coil on $15 Kase Bar Chart
Gold – Coil on $15 Kase Bar Chart

Today’s decline to $1927.2 challenged the lower trend line of the coil and fulfilled the smaller than (0.618) target of the wave down from $2024.6. This is bearish and suggests that the move down should continue to the $1888 equal to target. This is in line with the smaller than (0.618) target of the primary wave down from $2089.2. Settling below $1888 will call for a more significant decline.

Nevertheless, the move up to $2001.2 earlier in the week fulfilled the smaller than target of the wave up from $1874.2. This wave positive because this wave connects to $2059 and higher. The coil pattern may be building a bullish base, but until gold settles above $2001, the near-term outlook will continue to lean bearish.

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.