Gold Price Forecast: Analyzing the Recent Pullback After Hitting Record Highs
Gold's Recent Surge and Subsequent Pullback
Gold prices surged to a new record high of 2,600 following the U.S. Federal Reserve's announcement of a cut in rates by half a percentage point. The rally, however, was brief as resistance came into play, causing gold to sharply drop to a new low of 2,553.
Bearish Reversal Day Indicated
At present, rather than closing at a new record high, gold has fallen to a four-day low. It is poised to end the day at a three-day or four-day low. A deeper pullback seems imminent, potentially testing support around the breakout level of 2,532. This level is the prior trend high.
- The 20-Day moving average stands at 2,522 and has been tested successfully as support.
- If no support is found at higher levels, this moving average might be crucial as gold approaches it.
New Highs Reach Two Targets Within a Range
Resistance was observed within a forecasted zone from 2,595 to 2,605. This was the price point for a 127.2% extended target from a rising ABCD pattern and a target from a recent symmetrical triangle.
- The upside breakout from this pattern occurred in mid-August.
- Monday's price nearly reached this resistance zone.
Given today's bearish reaction at this level, it is likely that gold will either retrace or consolidate before resuming the bullish trend.
Outlook for Gold Prices
A decisive move above today's high of 2,600 is critical for triggering a bull breakout. If this occurs, gold could target another resistance zone from 2,650 to 2,661, based on Fibonacci analysis and measured ABCD patterns.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.