Gold Is at Risk of a Deeper Retracement

Gold Forecast Video for 12.05.23 by Bruce Powers

It is looking like gold may complete the week staying inside last week’s range. Until gold gets out of last week’s range, with a high of 2,067 and a low of 1,977, it will likely continue to chop around. Last week gold ended with a bearish shooting star candlestick pattern. It shows buyers being more aggressive early in the session, but they could not hold price up against the selling pressure, which pushed price back below the lower half of the week’s range.

Might Gold Follow Silver Down?

Today, silver reversed sharply triggering a bearish double top. Will gold reach a similar fate and break down rather than moving higher first? If last week’s low is broken to the downside gold is likely heading into a deeper retracement. However, there are other price levels just below that may present minor support. The key level is identified by the 34-Day EMA. It is currently at 1,993. You can see how the market tested support at the line on multiple days from late April to early-May.

Then, there is an important support zone around the prior top from early-February from approximately 1,966 to 1,946. A high of 1,960 was hit, leading to a correction. Support around that high was tested as support three to four weeks ago and price was rejected to the upside each time.

Declining ABCD Pattern in Play

As of today’s drop below Wednesday’s low gold may be beginning the CD leg of a declining AB=CD pattern. The parameters are drawn on the chart with an initial target of 1,966. That’s the top of the potential support zone noted above. The bottom of the zone is the 50% retracement level.

Uptrend Line and 200-Day EMA are Key Long-Term Support Levels

Note that the uptrend line at the bottom of a large rising trend channel is key support for the uptrend along with the 200-Day EMA, now at 1,873. The 100-Day EMA is now just above the uptrend line at 1,924. Nevertheless, at a maximum gold would be anticipated to find support at or before reaching the 200-Day line.

On the upside, the bearish scenario discussed above is negated on a daily close for gold above Wednesday’s high of 2,048.

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