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Gold Forecast Video for 02.10.23 by Bruce Powers
Volatility spikes in gold as it triggers a bullish rally above yesterday’s high before quickly encountering resistance at 1,880. Selling pressure subsequently accelerated, dragging gold down to below its earlier trading range and triggering a bearish trend continuation as it fell below yesterday’s low of 1,858. Gold has seen only a minimal bounce since hitting the day’s low of 1,846, which is not a sign of strength. Further it is set to close weak, in the lower third of the day’s range.
Gold Reached Support Zone from 1,805 to 1,843
Today’s decline reached the next potential support zone, which is from around 1,850 to 1,843. We will be watching closely for signs of support within this range. It is derived from the 50% retracement, the completion of a measured move (red lines), and the target from an AB equals CD pattern where the CD leg is extended by the 161.8% Fibonacci ratio.
Downward Pressure Continues into the Close
Given the decisive decline today, a likely weak close, and signs of accelerating bearish momentum, the next lower target zone could be reached sooner rather than later. A larger and second measured move shows a target down at 1,803, which matches the swing low from last February. That begins a price zone the goes down to around 1,787 due to Fibonacci targets, along with prior monthly lows. The monthly low for February of this year is 1,809 and for March it is 1,805.
If a Rally Comes
Holders of gold are being flushed out with this week’s rapid decline. Today’s price action does not show that it is over. Nevertheless, a rally, when it comes may be sharp given the pickup in volatility. In this case, the prior swing low of 1,885 is a price area to watch. It was support and could now be resistance on the way back up. In addition, the 1,900 area was also a previous swing low support and could see resistance on the way. Further details will be looked at once there are signs that a bottom might be in. Although it doesn’t mark a bottom, the RSI is getting more extreme to the downside and has reached the lower levels seen in July 2022.
For a look at all of today’s economic events, check out our economic calendar.
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