Gold Forecast – Gold Forming a Small Bear FlagGold 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.
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.
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.