This year-end is rich in reversals in gold. And yet, so many people fail to see them, blinded by bullish bias…The most recent one formed… Yesterday. And the previous one on the previous trading day.
In both cases, gold made attempts to break above the rising resistance line, and both attempts failed.Gold price’s inability to break back above this line and shooting star reversal patterns are both bearish.Today, gold is making another attempt to move above this line, and it’s likely to fail once again.None of those reversals is the key one, though. The key one is the one that we saw over 2 weeks ago on a weekly basis.
The turnaround was massive, and it created the key context for everything that followed. Last week’s and the previous week’s rallies? That’s just a rebound after the huge decline from the intraday top. We saw the same kind of rebounds after previous similar reversals, so why should this time be any different? It’s not.I already wrote about the above-mentioned reversal on Friday, so in today’s analysis, I’d like to emphasize one important thing about it.Namely, please note where gold recently corrected and what happened in the analogous cases.This year-end is rich in reversals in gold. And yet, so many people fail to see them, blinded by bullish bias…The most recent one formed… Yesterday. And the previous one on the previous trading day.
In both cases, gold made attempts to break above the rising resistance line, and both attempts failed.Gold price’s inability to break back above this line and shooting star reversal patterns are both bearish.Today, gold is making another attempt to move above this line, and it’s likely to fail once again.None of those reversals is the key one, though. The key one is the one that we saw over 2 weeks ago on a weekly basis.
The turnaround was massive, and it created the key context for everything that followed. Last week’s and the previous week’s rallies? That’s just a rebound after the huge decline from the intraday top. We saw the same kind of rebounds after previous similar reversals, so why should this time be any different? It’s not.I already wrote about the above-mentioned reversal on Friday, so in today’s analysis, I’d like to emphasize one important thing about it.Namely, please note where gold recently corrected and what happened in the analogous cases.Last week, gold almost touched its 61.8% Fibonacci retracement level, and it closed the week close to the 50% retracement. This is important because in both previous cases, when gold corrected above the 50% retracement based on the size of the initial decline, it meant that the final top was in.In the first case (2022), gold topped slightly below the 61.8% retracement, and in the second case, it topped slightly above that retracement. Last week’s top right below the 61.8% retracement perfectly fits the analogy to the first case.What does that mean? It means that the top is most likely in. Of course, history doesn’t have to repeat itself to the letter, but the above very strongly implies that there will be no significant rally from here, and that we’ll see a significant decline, instead. Seeing a small rally – like today’s pre-market upswing – is a different thing – it doesn’t change the pattern, it’s a part thereof.Let’s check the situation in gold’s sister metal – silver.
Silver price did again.The white metal once again tried to move above its early-2023 highs. And once again, it failed, which was followed by a decline.All previous attempts to break above this level were followed by declines, so it’s likely that we see lower silver prices shortly. This is especially the case that silver seems to have topped right at the rising, dashed resistance line. This makes declines from here even more likely.More By This Author:Gold Price’s Stealthy Breakdown
Hey, Remember About Gold Price’s Powerful Reversal?
Nothing New In Gold, But Big News For Gold