Gold Technical Analysis and Near-Term Outlook
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Gold rose to challenge the 20-day moving average after settling below a confluent and important target at $2632 on Wednesday. The wave down from $2708.7 still favors a test of its $2607 intermediate (1.382) target and possibly the $2594 larger than (1.618) target in the coming days. Taking out $2630 tomorrow will clear the way for a test of at least $2607.
Nevertheless, today’s bullish piercing pattern warns that the corrective move down might be complete. Given this afternoon’s post-settlement rise, there is also a good chance for a test of the 38 percent retracement of the decline from $2708.7 at $2653 first. A normal correction will hold $2563. Overcoming this would call for a test of key resistance and the 62 percent retracement at $2674. Settling above $2674 would imply that the corrective move down is complete and put the near-term odds in favor of testing $2700 again.
