Gold Technical Analysis and Near-Term Outlook
Gold’s move up for the past few days is most likely corrective of the downtrend that is poised to eventually reach $1631. However, because the primary wave up from $1673.3 has overcome its smaller than (0.618) target this wave will likely extend to fulfill its $1750 equal to (1.00) target before the decline continues. There is still an initial target around $1737 that gold must contend with, but a close above this will clear the way for $1750. Settling above $1750 remains somewhat doubtful but would call for the correction to reach $1768 and possibly $1781.
With that said, resistance around $1737 remains confluent and has held so far. Also, the pullback from $1738 forms a wave that could extend to challenge its $1713 smaller than target early tomorrow. Falling below this will call for a test of key support at $1698. This is the 62 percent retracement of the rise from $1673.3, so a close below this would imply that the corrective move up is complete. Therefore, caution is warranted because the move up could very well prove to be another short-lived correction. Settling below $1680 will confirm this and call for $1654 and then the downtrend’s next major objective at $1631.
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 ratio, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.
