Gold Technical Analysis and Near-Term Outlook
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December gold rose to challenge the $2672 XC (2.764) projection of the wave up from $2541.5 and the 50 percent retracement of the decline from $2801.8. This is a potential stalling point and there is a reasonable chance for a test of support before the move up extends. Even so, a move down ahead of the weekend will likely be a simple correction because the wave up from $2558.9 also met its $2675 smaller than (0.618) target today. This wave calls for a test of its $2705 equal to (1.00) target, which is in line with the 62 percent retracement from $2801.8. Settling above $2705 will strongly suggest that gold’s corrective pullback from $2801.8 is complete.
Should a correction take place first, look for initial support at $2650 to hold. Falling below this would call for a test of key near-term support at $2625. A normal correction of the rise from $2541.5 will hold $2625. Settling below this will warn that the move up is failing and shift the near-term odds in favor of gold testing the 62 percent retracement at $2593.
