Navigating Gold’s Crossroads: Bearish Trends and Potential Rally Signals

Gold Forecast Video for 10.01.24 by Bruce Powers

Today’s price action in gold was relatively uneventful as trading occurred inside the range of yesterday. Nonetheless, today’s high of 2,042 tested resistance around the 20-Day MA. Gold is set to close with a bearish doji shooting star candlestick pattern and weak, in the lower quarter of the day’s trading range.

Break Below Uptrend Line is Sign for Caution

Monday saw a direct successful test of support at the 61.8% Fibonacci retracement with a low of 2,017. That drop put gold below its uptrend line, and it closed below the line. That is not a sign of strength in the near term. Further, gold is likely to also close below the line today. This puts lower levels in site as they could be approached if supply begins to increase around current levels. Following today’s close, a drop below today’s low of 2,026 gives a bearish signal, which is confirmed on a drop below yesterday’s low.

50-Day MA Should Provide Significant Support

The more significant price support level is not much lower at the 50-Day MA, as it relates to the trend. It is now at 2,012. Recently, the 50-Day MA has successfully been tested as support twice and each time it was followed by a rally. Further down is the 200-Day MA at 1,963. Although if the 200-Day MA is reached the price structure of the current uptrend will be violated as gold would have dropped below the December 13 swing low at 1,973. Nevertheless, if gold drops below the 50-Day line it first heads towards the 78.6% Fibonacci retracement at 1,998.

Advance Above 2,042 Shows Strength

Since Tuesday is an inside day, a bullish breakout is triggered on a rally above today’s high of 2,042. That would put the price of gold back above its 20-Day MA, now at 2,038. But an advance above the two-day high of 2,047 will provide a bullish signal that has a better chance of leading to higher prices. Although there are several interim higher price targets, including the recent swing high at 2,088, a rising ABCD pattern targets completion at 2,132, very close to the recent record high of 2,135 from early-December 2023.

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