Analyzing Gold’s Bearish Trend and Potential Reversal

Gold Forecast Video for 16.08.23 by Bruce Powers

Gold continues its descent with a new retracement low of 1,896. On Monday, yesterday, gold closed below the 200-Day EMA for the first time since November 28 last year, a bearish sign. And today it is on track to again close below that 200-Day line. Today’s low was only three points away from support seen off the last swing low of 1,893 from late June.

Closed Two Days Below Key Moving Average

If gold stays below the 200-Day EMA, the chance for lower prices remains. It is a significant trend indicator that has just begun to show early signs of failure. A relatively quick recovery above the 200-Day line, however, could switch gold from bearish to bullish if it doesn’t fall much further in the near-term. Nevertheless, a continuation lower is what gold is currently signaling.

Lower Price Target Zones if Gold Keeps Falling

Once 1,893 is busted to the downside gold looks to be heading towards a pair of Fibonacci levels from 1,867 to 1,864 that includes the 127.2% Fibonacci extension of the most recent rally and the 78.6% retracement, respectively. Further down is a combination of the 88.6% Fibonacci retracement and the 161.8% extension of the most recent advance. Together, these two measures identify a potential support zone from approximately 1,836 to1,835.

Time Symmetry Suggests Possible Low Tomorrow

Next, we look at possible time symmetry that could impact the current retracement. Gold has been correcting for 18 days since the July 20 swing high of 1,987. Since November 3 it has retraced in increments of 18 or 19 days. You can see on the chart which prior retracements are being measured, plus the current pullback. Although there are a limited number of examples, gold reaches 18 days today and 19 days tomorrow. If time symmetry or similarity plays out, a low in gold should hit tomorrow. This is not a prediction, just an observation. Further confirmation is needed if it is to occur.

Daily Close Above 200-Day EMA Will Show Strength

The first sign of strength would be on a daily close above today’s high of 1,912. That would also put gold back above its 200-Day EMA, currently at 1,908. Further daily closes above the line start to indicate a likely bullish reversal that is sustainable.

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