Gold Technical Analysis and Near-Term Outlook
The outlook for gold remains bearish and the move up from $1877.1 is most likely corrective of the recent decline from $1927.0. Closing below $1879 will clear the way for $1855 and lower. Nonetheless, there is a modest chance for a larger test of resistance first, but $1908 is expected to hold.
Gold’s recent decline from $1927.0 stalled near the 62 percent retracement of the rise from $1851.0. The subsequent move up has been shallow and choppy and is most likely forming a bearish flag that is poised to break lower during the next day or so. Closing below $1879 will confirm that the move down is extending again and will call for $1855 and then $1842. The $1842 level is most important for the near-term because a close below this will clear the way for the next major objective at $1812.
With that said, the small waves up from $1877.1 suggest a test of $1908 might take place first. This is the 62 percent retracement of the decline from $1927.0 and is expected to hold. Closing above $1908 will call for $1924, the smaller than target of the wave up from $1851.0. This is a key threshold for the near-term because a close above $1924 will clear the way for $1942 and likely $1955.
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 ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.
