50 days MA resistance
The area to watch for potential resistance is around the 50-day MA, as a daily close above it would be a sign of strength. Since the line was successfully tested as resistance last Friday with the highest value of 2,666, it may again represent resistance. It also has the potential to top the flag just like the 2,666 high. Currently, there is a higher daily swing low within the flag at 2,622 and therefore a decline below that price level would be bearish. Earlier indications of weakness can be noticed around the lower parallel line or the 20-day MA.
Lower Swing High Followed by bearish behavior
As last week’s swing high has reached a lower swing high, there is potential for a bearish continuation of a developing ABCD pattern (orange). If the bear flag is activated, the opportunity to achieve lower goals increases. The previous swing low of 2,537 combines with the 50% retracement level at 2,534. Beyond that lies a potential support range of 2.4873 to 2.470, consisting of the 61.8% Fibonacci retracement and the target of a descending ABCD pattern, respectively.
200-day MA dropped to 2,441
The long-term trend indicator, the 200-Day MA, is slightly lower at 2,441. That moving average is important for the longer-term gold trend. Note that the line was reclaimed in mid-October 2023. Several tests of the line then occurred, with support and price each time returning to the upside. However, the current decline offers the possibility of a retest of the 200-day line as support after a strong advance and move up and away from the line. Given the above bearish short-term implications, the possibility that gold will eventually test support around the 200-day line should be considered.
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