Are you keeping a close eye on the gold market? If so, you’ll want to know that the next lower target for gold is around 2,332. This target is significant as it marks the completion of a descending ABCD pattern where two legs of the pattern are equal in terms of price depreciation.
Today’s decline in gold prices increases the likelihood of reaching the 2,332 target. If today’s low is broken during Friday’s trading session, then 2,332 becomes the next likely target. Additionally, there is a potential support zone lower down from around 2,305 to 2,298, derived from Fibonacci levels and trendlines.
However, caution is required if the lower price zone is reached as it represents a three-point line. Failure to hold as support could lead to a further downside acceleration in gold prices. Keep an eye on the rising parallel channel pattern in gold, as a breakout below the 2,294-swing low from June 26 could trigger a bearish signal.
To see signs of strength in gold, a breakout above 2,389 is needed. Today’s low found support around the 50-Day MA and a top trend channel line. If support holds and leads to a bounce, watch for resistance around the 20-Day MA and previous 50% retracement level at 2,389. A rally above this level could signal a potential change in the bearish scenario.
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