Gold Forecast: False Breakdown With Great Separation Below $1,782

Our gold forecast sees the precious metal trading at 1,795.27 level, right below 1,800 psychological level which stands as a static resistance. In the short term, it could continue to move sideways before offering us a clear direction.

As you already know, the yellow metal was into a corrective phase and now it has found support. Still, it’s premature to talk about a potential leg higher even if the price action has registered a false breakdown with great separation below the immediate downside obstacles. 

gold and silver round coins

Photo by Zlaťáky.cz on Unsplash

The US is to release its Pending Home Sales later but I don’t think that this will have a strong impact. The economic indicator is expected to register a 0.8% growth in October versus a 2.3% drop in September. Also, the ECB President Lagarde Speaks, BOC Gov Macklem Speaks, and the Fed Chair Powell Speaks could bring some volatility. 

The current week could be decisive as the fundamentals will have a big impact on all markets. Starting from tomorrow, the economic calendar will be filled with high-impact events that could rig sharp movements and both directions and could change the sentiment.

Canada’s GDP, Australian GDP, Fed Chair Powell Testifies, and the US ADP Non-Farm Employment Change, ISM  Manufacturing PMI, Non-farm Employment Change (NFP), Unemployment Rate, Average Hourly Earnings, and the ISM Services PMI could have a big impact on the XAU/USD. 

Gold Forecast: XAU/USD Price Technical Analysis – Range Pattern

(Click on image to enlarge)

The price of gold registered a sharp drop after failing to take out the 1,868.62. Now, it has reached the uptrend lines and the descending pitchfork’s median line (ML).

These are seen as downside obstacles. As you can see on the H4 chart, XAU/USD has registered a false breakdown with great separation below the 1,782.07, through the median line (ML), and under the first uptrend line.

From the technical point of view, as long as it stays above the 1,782.07 – 1,769.80, and above the uptrend lines, XAU/USD could develop a new leg higher.

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