Orthodontic week 2
Gold prices reached an all-time high of 2,790 two weeks ago. A decline soon followed. The weekly pattern was a gift. The week ended as a bearish reversal Doge shooting star (not shown) and the bearish signal triggered last week. This week is the second week of decline, and there is no sign of a reversal.
Gold is in a waterfall decline that could definitely test the price before the decline ends. The bearish sentiment is reflected in the 20-day moving average, which had been above the 50-day moving average since July 3, but recently fell below the 50-day moving average. Additionally, if the daily close falls below the monthly low of 2,602, the correction could be prolonged.
Monthly fee level
Monthly price patterns are important because they affect shorter time frames. Today was the first time in nine months that the previous month's low was broken. Since March, gold has mainly moved through a cycle of rising monthly lows and rising monthly highs. This pattern has been violated today, and if this break continues to be confirmed, it could lead to an even deeper and longer correction in gold prices.
Lower the target?
If the downward pressure on gold prices continues, there is a good chance that it will reach the 2,532 price zone. There is also a notable interim price range around 2,557-2,551, which consists of the 20-week moving average and the 127.2% extension target of the intraday descending ABCD pattern. The 20-week moving average is a potentially important support area, as it last marked support in early August. Since October 2023, gold has primarily traded above this.
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