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Home Gold Prices Gold Price Forecast: Rebounds but Bearish Retracement May Resume Below $2,894

Gold Price Forecast: Rebounds but Bearish Retracement May Resume Below $2,894

by anna

Gold prices showed signs of a short-term rebound on Wednesday, testing resistance around the $2,930 level, which represents the 78.6% Fibonacci retracement. The day’s high reached $2,930, slightly surpassing Tuesday’s high of $2,928. This followed a drop to support at $2,894 earlier in the trading session. Despite these short-term bullish signs, the context within the larger market pattern remains crucial, and gold is likely to face more challenges ahead.

Bounce to Test Prior Support as Resistance

After hitting a record high of $2,956 last week, gold pulled back below previous weekly lows and broke a rising trendline, as well as the 20-Day Moving Average (MA). Support was found at $2,833 last Friday, and a subsequent three-day rally brought gold to Wednesday’s high of $2,930. However, this rally is likely a counter-trend move, aiming to test previous support areas as resistance. The true bullish momentum would require a sustained advance above the record high of $2,956.

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The 20-Day MA was tested as resistance on Wednesday but failed to hold, reflecting short-term strength. As of today, the close is expected to be above this line, which is why multiple indicators are being considered in the analysis of the market’s trajectory.

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Weakness Below $2,894 May Signal Bearish Reversal

Gold’s behavior following last week’s breakdown is typical for the early stages of a bearish retracement. After breaking key support levels, an upswing usually follows to test prior support as resistance. If gold drops below today’s low of $2,894, the counter-trend rally could end, and a second leg down from the record high may begin.

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Next Lower Support Target Around $2,820

The analysis includes a declining ABCD pattern, which assumes that today’s high is a swing high. If this is correct, the pattern suggests an initial lower target around $2,820. This level is also supported by the 38.2% Fibonacci retracement at $2,813. Together, these levels create a strong support zone around $2,820 to $2,813, which could be tested if the bearish retracement continues.

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