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.
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