Deeper pullback would be health for trend
Resistance was seen at 2,786 last Friday, which led to yesterday’s withdrawal to a low point of 2,731. That is why a drop under that low weakness can lead to a deeper withdrawal. In that case, the price zone around the 20-day MA, now at 2,696, is an important trend support indicator. Note that it recently came together with a small rising trendline, making it a little extra meaning.
The 20-day MA was last recovered on January 7 and was followed by further strength. Since there has not yet been a test of the 20-day line as support, the 20-day line will be a target. But only if there is a signal that points to probably continuing to sell. A drop under the low point of Monday of 2,731 would give a signal. If the 20-day line fails, the lower 50-day MA at 2,663 becomes a target.
First higher goal on 2,823
At the top, signs of strength are indicated at a meeting above 2,773. Subsequently, a bull trend is generated on a breakout above the trend height of 2,786. Then a decisive outbreak above 2,790 record high points to a first upward target at 2,823. That is the extensive target of 127.2% for the rising ABCD pattern that is shown in the graph in purple. A little higher is the extended retracement of 127.2% for the most recent correction that ended at the Swing Low (A) of November.
Highest weekly final race ever
It is important to remember that last week ended with gold that was closed at its highest weekly final race ever. This is Bullish and supports evidence for a final continuation of new record highs. Given the meaning of resistance around the current record high, it would be healthy for gold to retreat a little more first. Let’s see what happens.
Look for a look in all the economic events of today Economic calendar.