Gold Price Forecast: Bearish Reversal Triggers Retracement from Recent Peak

A bearish reversal triggered in gold today with a breakdown from an inside day. This follows the 2,195-peak hit on Friday. There are several reasons why last week’s high might be followed by a retracement. It was a key target zone identified previously from measured moves, a symmetrical triangle pattern (blue boundary lines), and the completion of a rising ABCD pattern. Combined, the methods identified a strong target around 2,189 to 2,194.

Measured Move Completes

The 2,195-swing high completed a 10.6% rally from the February 14 swing low (C). It matches the two measured moves seen earlier in the uptrend structure beginning from October 2023 swing low. The first advance off that low was 11% and the second was 10.5%. This reflects symmetry in price between the three rallies. In addition, the time relationship was close. The first two advances took place over 15 days and the most recent topped after 17 days.

Symmetrical Triangle Target Hit

Moreover, the measuring objective derived from the symmetrical triangle on the chart identified 2,189 as a key new high target. Simply, the price height of the pattern (first rising purple arrow) is added to the breakout area to arrive at a minimum potential target.

ABCD Pattern Target Reached

Finally, a rising ABCD pattern shows symmetry between the AB leg of the rally and the CD leg of the pattern at 2,179. Not a perfect match with the above noted range, but still close. Regardless, it does provide further evidence for a price range where resistance is likely to be encountered.

Retracement Targets

Today’s bearish reversal breached a three-day low of 2,154 and puts gold on track to possibly close below that price level. Given the swing relationships noted above it seems likely to see a deeper retracement beyond the minimum before gold is ready to resume its ascent. The prior record high is at 2,035 and it marks the first zone where support might be seen. A little lower is the 38.2% Fibonacci retracement at 2,115. The next lower price level at 2,088 looks interesting as it is highlighted by two indicators. It is marked by the 50% retracement and was also a key peak resistance level in late-December (B).

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