Gold Losing Its Luster? – Gold Technicals

This post is a follow-up to our September 3rd post, Gold Technical Analysis

Gold Technicals

The gold market did indeed run out of steam with the double bearish divergence signals coming to fruition.  December Gold reversed with a $72/oz drop in 5 days.  Then, bounced up $38/oz and has stabilized since.  The bounce up to $1,532 was a 50% retracement of the initial decline and therefore sufficient for wave (B) to be complete.  However, it may be more likely this wave 4 correction needs a bit more time to play out.  Thus, do not be surprised if we rally back up near $1,532 before wave (C) gets underway and brings the market down to the target of $1,460/oz.  Both of these scenarios are illustrated in the hourly chart below.    $1,460 is where wave 4 is a .382 retracement of wave 3 and also where wave (C) = wave (A), if wave (B)’s extreme at $1,532 is indeed in place.  This cluster of Fibonacci gives added confidence to the target.

Gold Technicals

If the market abides by this forecast, and remains within parallel lines, all the pieces will be in place for a completed wave 4.  This will be an excellent opportunity to rejoin the bullish trend for wave 5 of c of (b) higher as shown in the weekly chart.

Gold Technicals