Gold’s Dilemma: Caught Between Moving Averages Amidst Bearish Momentum

Gold Forecast Video for 12.01.24 by Bruce Powers

Gold continued its descent today, falling to a new trend low before quickly finding support at the 50-Day MA with a low of 2,013. Resistance around the 20-Day MA and uptrend line were tested earlier in the session with price subsequently rejected to the downside. You can see how the 20-Day line has started to converge with the uptrend line, identifying a similar price. Gold is sandwiched between those two moving averages. Although today’s decline took gold below the prior retracement low at 2,017, it is on track to close above that price level, a little stronger than a close below that level.

Holding Support at 50-Day Moving Average

Since gold is sitting at support of the 50-Day line and there have been no signs of a reversal the odds favor a continuation lower until proven otherwise. A drop below today’s low has gold next targeting the 78.6% Fibonacci retracement at 1,998.

If a quick recovery follows to recover the 50-Day line, the retracement might be over and to be followed by a bullish reversal. However, further weakness would likely test monthly support at the daily swing low of 1,973. And given that the 200-Day MA (blue) is not much lower, it certainly would become a lower target as well if the 78.6% level is breached.

If Bullish Reversal Triggers Soon, Initial Target is 2,129

If today turns out to be a swing low and it is followed by a bullish reversal the initial primary target is up around 2,129. That would complete a rising ABCD pattern as shown on the chart, just shy of the 2,135-record high reached in early December. The price structure of the ascending parallel trend channel is at risk of being violated given the drop below the uptrend line on Monday. There have been two previous legs up and we are currently in the third leg up. There was symmetry in both time and price between the first two legs up, reflecting a strong foundation for the trend and the third leg. A bullish scenario may yet play out in the near-term if the price of gold holds above support of its 50-Day MA.

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