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The monthly nearby gold futures contract surged in September. The move confirmed the new main bottom at $1533.70. It also helped to create a new range between $1942.30 and $1533.70. The retracement zone of this range is $1738.00 to $1786.21.
The main trend is up on the monthly chart, but gold is going to have to take out $1942.30 to reaffirm the uptrend. A trade through the main bottom will turn the main trend to down. Currently, the market is testing the retracement zone. It could encounter resistance here so this is a critical area on the chart.
Countertrend traders tend to initiate positions in this zone and long traders tend to take profits. Whether the market shifts back to the downside will be determined by the volume on the downside and the buying interest on the long-side.
A trade through the Fibonacci level at $1786.21 could trigger an acceleration to the upside with $1838.30 the next upside target. This is followed by $1890.30. On the downside, uptrending Gann angle support moves to $1693.70 and $1613.70.
In summary, long traders are going to have to deal with the retracement zone before the market can move higher. Once it clears the last boundary at $1786.21 then new support will have to be established at this price and at the least $1738.00.