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 8, 2024
Did bulls miss an opportunity for further growth?
Technical Picture of Gold
Looking at the daily chart, we see that 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, encouraged gold bulls to fight, which resulted in a comeback above the previously broken upper border of the medium-term orange rising trend channel.
In this way, the futures invalidated the earlier breakdown, which translated into a higher open and a green pro-growth gap ($2,705.80-$2,713.85).
Despite this improvement, buyers didn’t manage to push the price above yesterday’s peak, which lured some bears to the trading floor and resulted in a verification of the breakout above the orange channel.
As you see, this support withstood the selling pressure, which resulted in a reversal.
Did it change anything?
Not really, because the price is still trading not only under yesterday’s peak, but also below the lower border of the mentioned green gap, which doesn’t bode well for the bulls – especially if they let their opponents to finish the day under the gap.
But will we see such price action?
Before I answer this question, let’s recall yesterday’s alert:
(…) So, what’s next?
Taking into account the above-mentioned support area (especially the green supportive gap marked on the daily chart) and the buy signals generated by the 4-hour indicators, it seems that further improvement may be just around the corner.
How high could the futures go?
(…) If the bulls manage to come back above the upper line of the orange trend channel from the daily chart and break above the first resistance zone (…) the way to the previously broken barrier of $2,700 will be open.
If it is broken, the buyers will likely test the second resistance zone (marked with the red rectangle with 2) created by the previously broken Sept.26 peak and the 50% Fibonacci retracement based on the entire Oct.10-Oct. 30 upward move, the bottom of yesterday’s first wave of decline, the 50% Fibonacci retracement based on this week’s decline, the 38.2% Fibonacci retracement based on the entire recent downward move (marked with red).
From today’s point of view, we see that the situation developed in line with yesterday’s pro-bullish scenario, and gold futures not only reached the mentioned upside targets but also climbed above the second resistance zone.
Despite this improvement, the 61.8% Fibonacci retracement based on this week’s decline (marked with orange) stopped the bulls, triggering a correction of the earlier upward move and a comeback to the previously broken first resistance zone (the 61.8% Fibonacci retracement based on the entire Oct.10-Oct. 30 upward move, the 23.6% Fibonacci retracement based on the entire recent downward move (marked with red) and the 38.2% Fibonacci retracement based on this week’s decline).
What’s next?
Looking at the above chart, we see that 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, in my opinion, it’s worth carefully observing the behavior of the market participants around the gap as it could give valuable clues about the direction of the next upswing/downswing.
What do I mean by that?
If the bulls manage to protect their ally and the futures close the day above the lower border of the gap, we’ll likely see a test of the next resistance zone from yesterday’s alert:
(…) the next battle will likely be in the third resistance zone (marked with the red rectangle with 3) created by the 50% Fibonacci retracement based on this week’s decline (marked with orange) and the bottom of the correction that took place on Oct. 23.
However, 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.
Summing up, although gold futures started Friday with a pro-bullish gap, the buyers failed to push the price above yesterday’s peak, which, together with the sell signals generated by the daily indicators and the red resistance zone (marked on the 4-hour chart) suggests that another downswing may be just around the corner.
Have a profitable day and a wonderful weekend, and see you on Monday.
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Anna Radomska