Gold Price Forecast: Analyzing Bearish Reversal After Record High

Market Overview

Gold triggered a daily bearish reversal on Friday, following a new record high of 2,686 reached Thursday. There was a confluence of several rising ABCD targets from the 2,660 to 2,675 price zone. Notice that yesterday closed just below the 2,675-level following a breakout above that price level earlier in the session. The decline today was clear as gold will likely end with a full red candle and daily close near the lows of the session.

Current Support Levels

Two key levels to help assess the health of the uptrend are identified first by the 20-Day MA, now at 2,568, and then the 50-Day MA, currently at 2,498. In each case, the moving average line has converged with the relative uptrend line, that also marks potential support.

Fibonacci Retracement Analysis

• On the way down, gold may first encounter support around the 38.2% Fibonacci retracement at 2,633.
• The next lower level to watch for support is the 50% retracement at 2,616, together with this week's low of 2,614.

Market Dynamics and RSI Observations

In addition to today’s bearish price action, the relative strength index (RSI) momentum oscillator looks to be recovering from overbought conditions. It is about to fall below the 70 level, supporting the narrative of bearish continuation in the short-term. If gold stays above the 20-Day MA during a retracement, the potential remains for an eventual continuation of the bull rally for gold.