Gold Technical Analysis and Near-Term Outlook
Gold failed to settle above Tuesday’s open and confirm yesterday’s bullish piercing pattern. Gold might be trying to form a bottom, but based upon the wave formations, near-term odds still lean in favor of a decline to challenge the next major objective at $1735. This is the target of the five-wave pattern down from $1919.2. Therefore, once met, a three-wave test of resistance is anticipated. Closing below $1763 will increase odds for a decline to $1754, which then connects to $1735.
Nevertheless, the waves up from $1750.1 warn that a larger test of resistance might take place first. Resistance at $1789 is expected to hold. However, closing above this will call for a test of key near-term resistance at $1802. Settling above $1802 would serve as an early warning that a bottom has been made and call for $1815 and possibly higher in the coming days.
This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ratio, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.
