Gold Technical Analysis and Near-Term Outlook
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December gold fell below the $2565 equal to (1.00) target of the wave down from $2801.8, the $2549 smaller than (0.618) target of the wave down from $2718.3, the 50 percent retracement of the rise from $2349.8, and the 100-day moving average today. Gold settled below the 50 percent retracement. Otherwise, the other important support targets held on a closing basis and a daily hammer formed. Daily bullish KasePO and KaseCD momentum divergence signals and an oversold KasePO PeakOut signal also formed at the $2541.5 swing low on the $10 Kase Bar chart.
The outlook for gold remains bearish and closing below $2555 will call for a test of the 62 percent retracement of the rise from $2349.8 at $2527. Settling below this will open the way for the next highly confluent target at $2503.
Nevertheless, given the confluence of support in the area tested today, a correction might occur first. Today’s hammer and the confirmation of intra-day bullish momentum signals also suggest that such a move will probably take place first. A move up will likely be a correction but there is a good chance for a test of $2595 first. This is the smaller than target of the current wave up from $2541.5 and overcoming this will call for a test of at least the $2610 equal to (1.00) target. The $2610 level will likely hold. Rising above $2610 would call for key near-term resistance at $2639 to be challenged.
