Gold Forecast – Gold Forming a Small Bear Flag

By:

Published: Sep 29, 2020, 14:16 UTC

Gold is rebounding in what appears to be a small bear flag. The pattern should resolve lower within the next few days resulting in a breakdown below $1850. Our work continues to support an intermediate cycle low within the next 1 to 3-weeks.

Gold peaked in August at $2089. The initial collapse to $1874 lasted just 3-days. Prices consolidated (descending triangle) for about a month, and the final breakdown is underway.

Bear Flag

The current rebound is taking the form of a small bear flag. These patterns often resolve themselves within 3 to 5 trading days. From here, the secondary collapse should resume with an ideal target window between $1705 and $1810. Optimal $1740 – $1780.

A picture containing graphical user interface Description automatically generated

The correction into an intermediate 6-month low is often filled with twists and turns, some very convincing – do not be fooled. This rally (bear flag) should be limited to $1900 to $1920 before prices turn back lower. Gold would have to close progressively above $1920 to advance an alternate scenario.

How markets react to tonight’s presidential debate will be interesting. Prepare for increased volatility.

AG Thorson is a registered CMT and expert in technical analysis. Premium members receive daily market updates. For more information, visit here.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

AG Thorsoncontributor

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle that will begin to unravel in 2020.