Drop Below 2,326 is Short-term Bearish
A drop below today’s low of 2,326 would provide an initial bearish signal that could lead to a test of the recent swing low at 2,291 and possibly a decline lower. If the 2,291-support zone fails to stop a decline the next lower target zone is from around 2,261 to 2,255. Two Fibonacci levels point to that price zone. Lower still is the 50-Day MA at 2,206. Further
Upside Potential Remains
On the upside, a breakout above this week’s high of 2,389. Would be needed to provide confidence that a rally may be able to continue higher and challenge the most recent record high of 2,431. Upside targets in gold remain. The question is will it enter a deeper retracement prior to a new high? The first higher target is the completion of an extended retracement at 2,462. It is followed by a price zone from around 2,480 to 2,488. The two-week low of 2,324 can also be watched for either signs of support or a breakdown. Certainly, it will provide a clue.
Watch for Additional Tests of Resistance
There may still be further tests of resistance heading into next week but the chance for a deeper retracement grows. Let’s consider the two recent sharp down days that reflected some degree of panic selling. The first was on April 12 and the second on April 22. If Friday’s high ends up being a swing high the chance for a further decline increases as well as the 2,212 to 2,207 lower target zone.
For a look at all of today’s economic events, check out our economic calendar.