2,753 targets lead to sales
While the upside target of 2,753 was met and appeared to be acknowledged by the market, gold still has higher targets that it could eventually reach once the retracement is completed. There are some important potential support levels to watch out for on the way down. The first is the latest breakout level, 2,686.
A bullish breakout is eventually followed by a pullback, often with the previous resistance breakout level subsequently being tested as support. Gold triggered a daily bearish reversal just four days after the bull market breakout, so there is a good chance it will rise again. Just below the previous breakout level is the 20-day moving average at 2,667.
Major Potential Support at 20-Day MA – 2,667
The 20-day moving average is a key short-term trend indicator for gold, given how gold has been perceived as support since retaking the 20-day line on August 8th. There were then two periods where the 20-day line was tested. It will be supported for multiple days, first in early September and then in early October. A bullish continuation followed each time the 20-day moving average held as support. Therefore, this means that the 20-day moving average is the largest expected retracement at this point. Additionally, anything below that would be bearish and the decline could continue.
250% extension leads to bearish reversal
As mentioned earlier, the 2,754 target is a 250% extended retracement of the decline that started from the March 2022 high of 2,070. This is an interim target before being set at a higher target zone of 2,797 to 2,815. The highest price target is the first target from the recent bull flag breakout, while the range begins with a 200% extended retracement target measuring the decline from the 2011 high.
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