Gold’s Bearish Turn: Navigating Support Levels and Future Possibilities

Gold Forecast Video for 11.12.23 by Bruce Powers

Following a brief attempt to advance Thursday, gold turned lower today, breaking through the uptrend line, and triggering a bearish continuation on a drop below the recent swing low at 2,010. Support was seen at the day’s low of 1,995, which was a little below the 21-Day MA, which is at 2,002. At the time of this writing gold has recaptured the 21-Day line. Today’s drop also took gold below last week’s low of 2,000. If gold closes below that level it will show a little more weakness than if it closes above last week’s low. Today will complete an outside week for gold.

Weekly Support Broken

Given today’s bearish trigger and likely close near the low for the weak, a continuation lower looks possible. However, if gold closes today above the 21-Day line, maybe it will have a chance at staying above the line hearing into next week. This is the second test of support around the 21-Day MA. The first test of the line as support on November 8 failed as gold dropped below it for about five days. The 61.8% Fibonacci retracement was exceeded today, putting the next lower ratio of 78.6% in line as a potential target. The 78.6% retracement is at 1,975. Next in line for possible support is the prior swing high from July 20 at 1,987. Below the 78.6% retracement is the 50-Day MA at 1,960.

Rally Above 2,044 Needed for Sign of Strength

Until there are signs of a low being established. As now it stands an advance above the four-day high of 2,044 would be needed for a sign of strength that might lead to gold moving higher from there. Potential resistance areas are then at 2,052, 2070 and 2083. That’s before the recent swing high of 2,135 is approached.

In the larger picture, gold’s recent high was testing a breakout of a 12-year basing pattern that begins from the September 2011 high. Given today’s decline it looks like a shakeout may occur before another attempt at record highs. If so, the lower price levels may get hit first.

For a look at all of today’s economic events, check out our economic calendar.