2,753 target leads to sales
While the 2,753 upside target was achieved and seemed to be recognized by the market, there are higher targets for gold that still have a chance of eventually being approached once a retracement is completed. There are some key potential support levels to consider on the way down. The first is the most recent breakout level at 2,686.
After a bullish breakout, a pullback will eventually occur and many times the previous resistance breakout level is then tested as support. Since gold has staged a bearish daily reversal just four days after the bull breakout, there’s a good chance it will be revisited. Slightly below the previous breakout level, the 20-day MA is at 2,667.
Key potential support at 20-day MA – 2,667
The 20-day MA is a key short-term trend indicator for gold given how it has been recognized as support since the 20-day line was retaken on August 8. There were two consecutive periods where the 20-day line was tested as multi-day support, first in early September and then again in the first half of October. Each time the 20-day MA was held in support, a bullish continuation followed. So this means that the 20-day MA is currently the maximum expected retracement. Furthermore, a break below would be bearish and could lead to a continuation of the decline.
A 250% extension leads to a bearish reversal
As previously discussed, the 2,754 target is an extended 250% retracement of the decline that started from the March 2022 high at 2,070. It is an intermediate target prior to a higher target range from 2,797 to 2,815. The top price target is the original price target after the recent bull flag breakout, while the range starts with an extended 200% retracement target that measures the decline from the 2011 high.
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