More of the same or something new?
In today’s gold price forecast, I decided to share with you my insights from yesterday’s Quick Gold Alert. Have a nice read!
Technical Picture of Gold
The first thing that catches the eye on the daily chart is yesterday’s closure slightly below the upper border of the orange rising trend channel, which doesn’t look encouraging.
(…) despite yesterday’s pullback and today’s move to the south (…) gold futures are still trading above the previously broken Aug.2 peak, which means that the overall situation in the short term hasn’t changed.
On top of that, when we take a closer look at the current situation in the 4-hour chart, we also see that not much happened yesterday.
What do I mean by that?
(…) although the sellers tried to break to lower levels, they failed, which confirms that yesterday’s scenarios are up to date.
(…) What does it mean?
In my opinion, as long as there is no successful breakdown under the lower line of the formation (at $2,538.75) another attempts to move higher can’t be ruled out – especially when we factor in the fact that this line is not far from the previously broken upper border of the green rising trend channel (currently at around $2,536.55), which continues to serve as an important support.
(…) a potential bullish scenario (…)
If the situation develops in line with this scenario, we’ll likely see a test of the upper border of the orange consolidation at $2,568.70 (and probably an attack on yesterday’s peak).
(…) a potential bearish scenario (…)
If the bulls do not manage to hold the price at the current levels and let their opponents to break below the lower border of the orange consolidation, we could see not only a test of the previously broken upper border of the green rising trend channel (currently at around $2,536.55), but also a drop to around $2,508.80, where the size of the decline would correspond to the height of the formation.
However, before the bears can start celebrating at this level, they will have to go below the Monday’s green gap seen on the daily chart ($2,537.80-$2,549.70), which continues to serve as the nearest support (its lower line is slightly above the lower border of the orange consolidation form the 4-hour chart and the above-mentioned upper border of the green rising trend channel, which together create the key support zone at the moment).
If this solid support is broken, we could see a test of the 38.2% Fibonacci retracement (marked with blue and based on the Aug.15-Aug.20 upward move, which is currently at around $2,531.21) and the first purple support zone (marked with 1 on the 4-hour chart) created by the 50% Fibonacci retracement (marked with blue) and the previously broken zone based on the Aug.2 and the Aug 14 peaks (marked with green horizontal lines).
If these supports are broken, the next target would be the mentioned range based on the orange consolidation ($2,508.80) and the second purple support zone (marked with 2 on the 4-hour chart) created by the 61.8% Fibonacci retracement (marked with blue), the 38.2% Fibonacci retracement based on the entire Aug. upward move and the upper line of the previously broken orange consolidation (at $2,507.80).
Summing up, gold futures closed Wednesday slightly below the upper border of the orange channel, which is a warning signal that requires increased vigilance and attention. However, the major bulls’ allies continue to keep the price in a narrow range, which means that as long as there is no daily closure under the nearest key support zone (…) and the futures are trading above the previously broken Aug. 2 peak the way to the south is blocked (…). Finishing today’s comments, please keep in mind that high caution is highly recommended when making investment decisions at these levels.
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Anna Radomska