Gold Price Forecast: Faces Bearish Retracement, Key Support Levels in Focus

Bruce Powers
Updated: Jun 13, 2024, 23:30 GMT+00:00

Bearish signs increase for gold as it falls below key near-term levels, with support zones from 2,287 to 2,277 and potential targets around 2,252.

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Gold triggered a bearish drop below yesterday’s 2,311 low today, thereby triggering an initial signal for a small bearish flag from the past few days. Resistance for the day was seen at 2,327, which was below yesterday’s high of 2,342. Sellers have been dominating price action since.

At the time of this writing gold looks like it will likely end Thursday’s trading session with a full red candle closing near the lows of the day. That will setup up gold for a continuation lower. However, confirmation of weakening will be needed as recent support may continue to stop the descent.

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Bearish Continuation Below 2,287

There is a price support zone for gold from around last week’s low of 2,287 to the prior swing low at 2,277 from early May. Given recent bearish price behavior, including a drop below the 50-Day MA, the bearish rejection at resistance around the 50-Day line yesterday, and a bearish trend continuation signal given when gold fell below 2,315 (B), the risk of a deeper retracement is growing.

The bottom of the current support zone is at 2,277. Therefore, a decisive drop below that price level is needed for a clear bearish continuation signal. A decline below 2,287 will show weakening but not necessarily a breakdown that is sustainable as support may still be seen around the May swing low.

Lower Target Zone Approaches Trendline Support

The next lower target area is around 2,252. That is where a falling ABCD pattern completes. Both the AB leg of the decline and the CD leg will match the price change at that target. It will reflect price symmetry between the two swings. Once there is symmetry, the possibility of an important pivot is identified. Nevertheless, a decline below 2,252 will likely lead to a test of support at lower levels. Lower down is a price zone from roughly 2,211 to 2,195.

That area was previously the top of the trend and initiated a decisive breakout that propelled gold higher. Prior resistance areas tend to be subsequent support on a pullback, and that is what may occur with gold. If this lower price zone is approached the lower uptrend is another indicator to watch as it defines a lower parameter for a rising parallel trend channel.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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