In today’s article, I decided to share with you my insights from today’s Quick Gold Alert. Have a nice read!
February 13, 2025
Verifications, invalidations and key levels to watch.
Technical Picture of Gold
In Tuesday’s Quick Gold Alert, you could read the following:
(…) the breakdown under the upper line of the channel, will result in a test of the lower line of the very (very) short-term black rising trend channel, which is slightly below the 38.2% Fibonacci retracement and together with the previously broken Feb.2 intraday peak they all create the first bears’ downside target (around $2,900 - $2,906).
What’s next?
If this area withstands the selling pressure and the bulls manage to protect it, a rebound could be in the cards.
Why?
Because if the price bounces it off, we’ll likely see a verification of the earlier breakout above the barrier of $,2900 and the mentioned Feb.5 peak. In other words, such price action would be a positive technical development, which could translate into a comeback to the north (…)
From today’s point of view, we see that the situation developed in tune with the above assumptions, and gold futures moved to the previously broken key supports: the upper border of the medium-term orange rising trend channel and the barrier of $2,900 during yesterday’s session.
Their combination lured even more bulls to the trading floor, which translated into a rebound before the end of the day. Thanks to this upswing, gold bulls invalidated the earlier tiny breakdowns under these key supports, which resulted in a higher Thursday open (Asian trading hours), creating a tiny green supportive gap ($2,928.70-$2,929.81) on the daily chart.
On the one hand, such price action looks like a verification of the earlier breakouts above these lines, which could be considered a bullish development. However, on the other hand, we should keep in mind that although this positive development triggered a further improvement in the following hours, the futures are still trading under the upper border of the red gap ($,2927.89-$2,932.60 formed yesterday), and the upper line of the short-term rising trend channel.
Therefore, in my opinion, as long as there is no daily closure above yesterday’s red gap and the upper line of the short-term rising trench channel another attempt to move lower can’t be ruled out.
If this is the case, the first downside target for the bears will likely be the lower border of the very short-term black rising trend channel marked on the 4-hour chart. At this point, it’s worth noting that the bulls managed to invalidate the earlier breakdown under this line during yesterday’s session (a positive technical development), but it seems that the bears may want to check determination in this area once again.
Therefore, if the bulls confirm their strength there, we can see another reversal, further improvement, or maybe even an attack on Tuesday’s peak or the 161.8% Fibonacci extension at around $2,977 in the coming day(s).
However, if the buyers fail there, the way to the previously broken 38.2% Fibonacci retracement, yesterday’s low, the key supports described under the daily chart, or even the 61.8% Fibonacci retracement (based on the entire Feb. upward move at around $2,865) will likely be open.
Finishing today’s comments, please keep in mind Tuesday’s quote:
(…) in this area the range of the downward movement will be (more or less) equal to the height of the mentioned very short-term black channel (I marked them with grey rectangles on the chart), which may encourage the bears to start taking profits from their short positions.
Summing up, gold bulls verified the earlier breakout above the upper border of the medium-term orange rising trend channel and the barrier of $2,900, which resulted in a green pro-bullish gap and a comeback to the upper line of the short-term channel earlier today. Although this is a positive development, further improvement will be more likely and reliable only if the buyers manage to close today’s session above yesterday’s gap and the upper border of the short-term rising trend channel. In this case the probability of attack on Tuesday’s peak or even 161.8% Fibonacci extension will increase. However, until this time another attempt to move lower and re-test of the key supports can’t be ruled out. Therefore, in my opinion, staying extra cautious and sharp when making investment decisions at these levels is definitely a smart move.
Have a profitable day, and see you tomorrow.
Anna Radomska