Gold returns to the downward correction 10/6/2024

Gold prices experienced a sharp decline, surrendering recent gains due to a strengthening U.S. dollar following the release of strong U.S. jobs data last Friday. The precious metal, which previously struggled to break above the 2360 resistance level, has now fallen below the crucial 2318 support, reaching a low of $2286 during today’s morning trading session.

Technical analysis on the 4-hour timeframe chart confirms the bearish outlook. The price has decisively broken below the 2318 support level, and the simple moving averages are now exerting downward pressure. Additionally, the bearish technical formation on the chart further supports the potential for continued decline.

Given these factors, the corrective decline is likely to persist. The initial target for this bearish move is 2272. A break below this level could intensify the downward momentum, potentially pushing gold prices towards 2257 and 2220.

However, it’s important to note that the bearish scenario remains valid only if the price stays below the main resistance level of 2360. A successful rebound and consolidation above this level could invalidate the bearish outlook.

Traders should exercise caution as the gold market remains exposed to high risk due to ongoing geopolitical tensions, which could trigger significant price fluctuations.

Disclaimer: Trading in CFDs involves risks, and all scenarios are possible. This analysis is not investment advice but rather an interpretation of the current technical landscape for gold.

S1: 2272.00	R1: 2360.00
S2: 2257.00	R2: 2420.00
S3: 2220.00	R3:  2460.00