In today’s gold price forecast, I decided to share with you my insights from today’s Quick Gold Alert. Have a nice read!
November 12, 2024
Bearish Monday, breakdown, and downside targets to watch.
Technical Picture of Gold
Let’s start today’s analysis by quoting the last Quick Gold Alert:
(…) What’s next?
(…) the price came back to the second resistance zone once again, but this time the bulls failed to break above it, which raises some concerns about their condition – especially when we take into account their inability to use the green pro-growth gap to push the price higher.
Therefore, (…) considering today’s bulls’ visible weakness, it seems that another re-test of the upper line of the orange channel may be just around the corner.
If the buyers fail here, the way to around $2,676 (the 61.8% Fibonacci retracement based on yesterday’s rebound), $2,665 (the 78.6% Fibonacci retracement based on yesterday’s rebound) or even the support area created by the 78.6% Fibonacci retracement (based on the Oct.10-Oct.30 upward move) and the bottom of the correction from mid-Oct could be open.
Looking at the above charts, we see that the situation developed in accordance with the last week’s pro-bearish scenario and the sellers not only reached the mentioned targets, but also pushed the price lower.
As you see on the daily chart, gold bears finished Friday’s session not only under the lower border of the gap ($2,705.80-$2,713.85), but also below the previously broken upper border of the medium-term orange rising trend channel and the barrier of $2,700.
This show of the bulls’ weakness translated into a lower Monday’s open and created a red pro-declining gap ($2,692.10-$2,694.80), which lured even more sellers to the trading floor and accelerated the declines.
Thanks to yesterday’s sharp downward move gold futures broke not only under the 78.6% Fibonacci retracement (based on the Oct.10-Oct.30 upward move), but also closed the gap formed on Oct. 11 and finished the day slightly below the Oct. 10 low.
Although this area encouraged some bulls to act during Asian trading hours, the pro-growth small gap created at the start of the day was closed, which quickly translated into another downswing that took the price to the important support area created by the 38.2% Fibonacci retracement (based on the entire Jun.-Oct. upward move) and the barrier of $2,600.
These supports triggered a small rebound before the U.S. market open, but despite this move, the price is still trading under the previously broken Oct.10 low of $2,618.80, which suggests that as long as there is no invalidation of the breakdown under this support all upswings should be considered as nothing more than a verification of the breakdown.
Additionally, the sell signals generated by the daily indicators remain in the cards, supporting the bears and further deterioration.
Will we see such price action?
Considering last week’s breakdown under the lower border of the purple rising wedge (which served as support many times in the past), it seems that we could see a slide to around $2,683, where the size of the downward move will correspond to the height of the formation (marked with purple rectangles on the daily chart).
At this point, it is worth keeping in mind that in this area the bulls will find the first green support zone (marked with the green ellipse) created by the green supportive gap (2580.60-2587.50) from Sept.13, Sept.18 and 19 lows, the previously broken Aug. 20 peak of $2,570.40 and the 127.2% Fibonacci extension (based on the Oct.10-Oct.30 upward move).
On top of that, in this area the ABCD formation (marked with the blue rectangles) will be completed, which could encourage the sellers to take profits off the table and translate into a reversal in the coming day(s).
Summing up, although gold futures started Tuesday with a small pro-bullish gap, gold bears took control very quickly and deprived their opponents of this ally, which together with yesterday’s sharp move, breakdowns under important supports, the sell signals generated by the daily indicators and ranges of the downward move based on the technical formations suggests that further deterioration may be just around the corner.
Have a profitable day, and see you tomorrow.
Thank you for diving into today’s gold insights. If you’d like to access even more timely updates and trading tips, consider trying our Quick Gold Alerts—a premium service designed to keep you one step ahead in the gold market. For a limited time, you can start with a free 16-day trial, giving you a risk-free way to explore the full benefits our premium subscribers rely on. Don’t miss out on staying informed and ready to act as market shifts happen. Start your free trial today!
Anna Radomska