Gold Price Forecast: November Selloff Warns Of Shift In Market Behavior

However, new market trends appear to be taking shape ahead of 2021 as the price of gold no longer traders to fresh yearly highs during every single month in 2020, and the correction from the record high ($2075) now appears to be a shift in market behavior rather than an exhaustion in the bullish price action as the precious metal trades at its lowest level since July.

With that said, the price of gold may continue to move to the beat of its own drum as it seems to be searching for support, but the Relative Strength Index (RSI) may show the bearish momentum gathering pace if the indicator pushes into oversold territory for the first time since 2018.

GOLD PRICE DAILY CHART

(Click on image to enlarge)

Image of gold price daily chart

Source: Trading View

  • The price of gold pushed to fresh yearly highs throughout the first half of 2020, with the bullish price action also taking shape in August as the precious metal tagged a new record high ($2075).
  • However, the bullish behavior failed to materialize in September as the price of gold traded below the 50-Day SMA ($1891) for the first time since June, with developments in the Relative Strength Index (RSI) negating the wedge/triangle formation established in August as the oscillator slipped to its lowest level since March.
  • The correction from the record high ($2075) now indicates a potential shift in market behavior rather than an exhaustion in the bullish trend as the price of gold trades at its lowest level since July, with the RSI highlighting a similar dynamic as it comes up against oversold territory.
  • The RSI may show the bearish momentum gathering pace if it breaks below 30 for the first time in 2020, with the oversold reading likely to be accompanied by lower gold prices like the behavior seen in 2018.
  • The price of gold appears to be recovering ahead of the 200-Day SMA ($1797) as it bounces back from the weekly low ($1800), but lack of momentum to push back above the $1816 (61.8% expansion) to $1822 (50% expansion) zone keeps the $1786 (38.2% expansion) area on the radar, with the next region of interest coming in around $1754 (261.8% expansion) to $1762 (78.6% expansion).
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