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.
The longer-term outlook for gold is bullish after settling above the $2867 smaller than (0.618) target of the wave up from $2392.4 on February 4. This wave calls for an eventual test of its $3041 equal to (1.00) target. However, the move up has been due for a correction and today’s move down confirmed a daily bearish MACD divergence and an overbought daily RSI signal. The daily KasePO is also overbought and a daily hanging man formed. The hanging man would be confirmed upon a close below $2854, which should also confirm the KasePO overbought signal.
This is a tight call for the near-term but the outlook for tomorrow lean bearish. Another test of $2854 is expected, a close below which will call for $2840. A minimal correction will hold $2840 because this is the 21 percent retracement of the rise from $2586.7. Settling below $2840 will call for an extended correction to challenge $2814 and then the 38 percent retracement at $2784.
Nevertheless, the MACD divergence, RSI overbought signal, and hanging may fail to lead to a deeper test of support. This is because the equal to (1.00) target of the intra-day wave down from $2906 held and prices have already retraced just over 50 percent of the decline from $2906. Overcoming the $2894 intra-day swing high will invalidate the wave down from $2906 and call for a test of $2914. Settling above $2914 will call for the test of another major target and potential stalling point at $2931.
