Unveiling Gold’s Future: The ABCD Pattern and Critical Price Zones

Gold Forecast Video for 10.08.23 by Bruce Powers

Another new trend low in gold today as it targets the 78.6% Fibonacci retracement or the 200-Day EMA. Today’s drop took gold below the final trendline today and it is on track to close weak, near the low of the day, and below the final trendline that marked potential support. Potential support of the 78.6% retracement is at 1,913, while the 200-Day EMA is at 1,908. Further down is possible support around the previous swing low at 1,893.

Selling Momentum Increasing

As gold is still coming down and momentum to the downside is increasing (new trend lows, wide range red candles) the possibility exists that it will test both the 200-Day line and prior swing low. If that occurs, we will watch the recovery (or continued decline) closely for clues of what’s next.

Falling ABCD Completes at Golden Ratio Extension

A declining ABCD pattern has been added to the chart today. It shows the completion of an ABCD pattern with the CD leg extended by the Golden Ratio of 1.618. The completion comes in just above the 200-Day EMA at 1,909. Together, a potential support zone can be considered from 1,913 to 1,908 combining the various price indications.

The ABCD pattern looks for symmetry between two swings, the AB swing, and the subsequent CD swing. If an initial target that shows symmetry between the two swings (CD = 100% of AB) is exceeded the chance of price reaching the next Fibonacci extension increases. The 127.2 Fibonacci extension has already been exceeded to the downside; therefore, the Golden Ratio target is next.

Gold Set to Close Weak

Gold is trading near the low of the day at the time of this writing and looks to be heading lower. On a daily timeframe, a rally above today’s high of 1,932 would be the first sign of strength beyond stopping the decline and consolidating. This week’s high is 1,947 and a rally above that level would further show strength. Last month’s low was 1,903. That is another important price level as a drop below it is bearish on a monthly basis. This doesn’t mean that gold keeps dropping but it is a key pivot to be aware of.

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