Gold Near-Term Outlook
The near-term outlook for December gold futures leans bearish. Gold initially rose to $1980 as expected today. However, this level, which is in line with the 62 percent retracement of the decline from $2024.6 and the 20-day moving average, held on a closing basis. Also, the subsequent move down from today’s $1987.0 high fulfilled the $1915 smaller than (0.618) target of the wave down from $2024.6. Therefore, odds favor a continued decline, and a move below $1915 will clear the way for $1891 and lower.
Nevertheless, trading has been erratic for the past few days. So far, the move up from $1914.7 has held the 38 percent retracement of the decline from $1987.0. However, should gold rise a bit higher first, look for resistance at $1961 to hold. Closing above this would shift near-term odds in favor of key resistance at $1997. This is the equal to (1.00) target of the wave up from $1908.4 and, more importantly, the smaller than target of the wave up from $1874.2. Settling above $1997 would call for gold to make a push for at least $2023 and likely higher next week.
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.