Gold has fallen by 200 points since hitting our 3rd short entry zone on the 8th January.
We had hoped that gold would find a short term bottom at around 1700 on the 5th February to head into what could be a strong short term cycle – THIS DID NOT HAPPEN. Instead, Gold confirmed upper resistance on the short term trend and a subsequent fall below 1775 raised alarm bells on our weekly cycle analysis.
As a result we see Gold continuing to head down for a least the next few months – and possibly longer.
The chart above shows 4 potential “long entry” scenarios. We have no short entry zones which would improve upon the short zone identified in January 2021.
Scenarios 1 and 2 are around 1300 (give or take) with scenario 1 needing to play out by early May 2021 and Scenario 2 needing to play our by late August 2021. Scenarios 3 and 4 are well off into the future – in 2022.
At this stage it is not clear whether these entry points will be long term bottoms or whether they will just afford a bounce of a few hundred points.
Over the coming weeks gold could easily bounce to 1845 without giving us concern over our forecast. A move above 1850 would maybe result in us looking at it again but it would need to exceed 1960 for us to scrap these targets.
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As always our posts are not investment advice. If you wish to trade or invest based on our analysis you should do so with great caution and consult your financial adviser. Remember never to invest or trade more than you can afford to lose.