Welcome to Extreme Investor Network, where we provide you with unique insights and expert analysis on the Stock Market, trading, and all things Wall Street. Today, we are taking a closer look at the current state of gold prices and what it means for traders.
Gold is currently testing support at the 50% retracement level, with the day’s low hitting 2,301. This support level, combined with the top trend channel line at 2,298, is acting as a possible stop to the descent of gold prices. However, it is important to note that today’s drop has taken the price of gold below the 50-Day MA, signaling a potential breakdown. The key price level to watch is the most recent swing low at 2,277, as a break below this level could signify a shift in the trend structure.
The failed weekly breakout from Thursday has set the stage for lower prices in gold. The sharp bearish reversal seen in today’s price action confirms a falling ABCD pattern, with initial targets at 2,252 and extended targets at around 2,215. Additionally, the lower target aligns with a prior trend breakout area and the 78.6% Fibonacci retracement level, adding further support to the downside potential.
One of the key concerns for gold traders is the rising trend channel. While gold was attempting to break out of a rising parallel trend channel on recent highs, a drop below today’s low could signal a breakdown back into the channel. This breakdown would increase the likelihood of a drop towards the lower line of the channel, presenting further downside risk for traders.
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