Gold Technical Analysis and Near-Term Outlook
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.
Gold rallied today and finally settled above the $2795 equal to (1.00) target of the wave up from $2565 and fulfilled the $2825 target. The $2826.3 swing high was overcome but there is potential for a double top with today’s $2829.5 high. Nonetheless, it is doubtful that the double top will form because the wave formation calls for a test of a minor target at $2835 and then the next major target at $2849. The $2849 objective is highly confluent, and, most importantly, is in line with the smaller than (0.618) target of the largest wave up from $2372.6.
Aside from the potential for a double top, there are no other bearish patterns or signals that call for the move up to stall. Even so, after such a large single day move up a test of support might take place first. Today’s $2798 midpoint is expected to hold. Key support for the near term is today’s $2773 open and the 21 percent retracement of the rise from $2565. Settling below $2773 before prices rise any higher would indicate that a double top has formed and call for an extended test of support in the coming days.
