Gold’s Bearish Retreat: Will It Find Support or Slide Further?

Gold Forecast Video for 09.11.23 by Bruce Powers

The bearish retracement in gold continued today, falling to a low of 1,948 and a potential support zone around prior swing highs from 1,953 to 1,947. Gold accelerated its decline generating a wide range of red candlestick pattern for the day. Trading remains bearish, near the lows of the day, at the time of this writing. If gold closes in the lower third of the day’s range, it will be closing weak.

Clearly Bearish Today

Given the clear selling since the breakdown of the small rising channel, it looks like gold may bust right through the next potential support zone and head straight to the 38.2% Fibonacci retracement at 1,933, along with the 50-Day EMA at 1,937. During the recent rally gold climbed back about the 50-Day line and kept rising. To support the bullish case for gold it should act as support on this first test. If so, it would confirm the strength seen in the rally and reflect strong underlying strength. Less so if gold falls to the next lower support zone that includes the 200-Day EMA.

Lower Support Zone with the 200-Day EMA a Possibility

The confluence of several indicators points to the 1,915 to 1,910 price zone as potential support. It begins with the 200-Day EMA and includes the completion of a falling ABCD pattern with the CD leg extended by the 2.27% Fibonacci ratio. Further, the 50% retracement level is at 1,910.

Where Support is Found May Provide Clues for What Follows

Following the retracement gold is anticipated to again behave in bullish fashion. It showed strength in the recent rally upon breaking above the 200-Day EMA, the 50-Day EMA and the downtrend line marking dynamic resistance for the correction. As it pulls back to test support levels during the retracement, the higher support is found that leads to a bullish reversal, the stronger the signal may be. However, gold is now trading inside last month’s range after triggering a bullish breakout on the monthly chart last month and rising to a five-month high. We could see gold take a rest with a retracement and consolidation for this month and end with an inside month.

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