Gold has experienced a notable pullback, dropping below the critical $2,600 per ounce support level after reaching an all-time high of $2,789.99 on October 31. The decline signals a potential for continued bearish momentum, especially following a "failure swing" reversal. The downtrend is further reinforced by Gold's slip below the 50-period EMA and bearish indicators from both the Momentum oscillator and RSI, which suggest more near-term downside.
Overview
Gold has experienced a notable pullback, dropping below the critical $2,600 per ounce support level after reaching an all-time high of $2,789.99 on October 31. The decline signals a potential for continued bearish momentum, especially following a "failure swing" reversal. The downtrend is further reinforced by Gold's slip below the 50-period EMA and bearish indicators from both the Momentum oscillator and RSI, which suggest more near-term downside.
Key Economic Events
Tuesday 09:00 am (GMT+2) - UK: Claimant Count Change (GBP)
Wednesday 15:30 (GMT+2) - USA: CPI m/m (USD)
Thursday 02:30 am (GMT+2) - Australia: Employment Change (AUD)
Thursday 15:30 (GMT+2) - USA: PPI m/m (USD)
Friday 09:00 am (GMT+2) - UK: Retail Sales m/m (GBP)
Friday 15:30 (GMT+2) - USA: Retail Sales m/m (USD)
Technical Analysis
Gold prices have experienced a significant decline, falling below the key psychological support level of $2,600 per troy ounce after reaching an all-time high of $2,789.99 on October 31. The drop has created further potential for a downward trend. A bearish reversal, referred to in technical analysis as a "failure swing," has intensified this momentum. Specifically, the recent peak at $2,710.33 did not surpass the previous peak, and prices subsequently dropped below the trough at $2,643.05.
Additionally, Gold has fallen below the 50-period Exponential Moving Average (EMA), and the downward trend is further confirmed by bearish signals from both the Momentum oscillator and the Relative Strength Index (RSI). The Momentum oscillator remains below the 100 baseline, while the RSI is also below 50, indicating continued potential for further declines in the near term.
Potential Upside Targets
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
2643.05: The initial resistance is 2643.05, which represents the low point from November 7.
2692.62: The second price target is identified at 2692.52, corresponding to the weekly Pivot Point, PP, calculated using the standard methodology.
2742.00: The third target is established at 2742.00, aligning with the weekly resistance, R1, estimated using the standard Pivot Points methodology.
2789.99: An additional price target is estimated at 2789.99, which corresponds to the all-time high reached on October 31.
Potential Downside Targets
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
2601.47: The first level of support is identified at 2601.47, representing the 161.8% Fibonacci Extension drawn from the swing low of 2643.05 to the swing high of 2710.33.
2534.19: The second support level is 2534.19, reflecting the 261.8% Fibonacci Extension drawn from the swing low of 2643.05 to the swing high of 2710.33.
2477.67: The third support level is identified at 2477.67, corresponding to a peak formed on August 2.
2425.33: An additional downward target is observed at 2425.33, corresponding to the 423.6% Fibonacci Extension drawn from the swing low of 2643.05 to the swing high of 2710.33.
Fundamentals
Gold prices remained near a one-month low on Tuesday, November 12, due to a strong US dollar and investor caution ahead of key US economic data and Federal Reserve commentary. XAUUSD slipped 0.6% to $2595.21 per ounce, marking its lowest point since October 10.,
The US dollar strengthened to a near four-month high as investors anticipated economic policies under President-elect Donald Trump, making Gold less attractive to holders of other currencies. Analysts noted that Trump's expansionary plans and corporate tax cuts could increase inflation, potentially limiting the Federal Reserve's ability to further loosen monetary policy and supporting the dollar, which puts pressure on gold prices.
Traders are closely monitoring upcoming US economic reports—including the Consumer Price Index (CPI), Producer Price Index (PPI), and retail sales data—as well as statements from Federal Reserve officials like Jerome Powell for insights on future interest rate movements. While Gold faces short-term pressure from a strong dollar and rising bond yields, analysts remain cautiously optimistic about its long-term outlook, suggesting that a slowdown in the dollar's momentum or a soft inflation report could benefit gold prices.
Conclusion
Gold's recent dip below $2,600 per ounce highlights a fragile technical outlook, with bearish indicators pointing toward potential further declines. The failure to maintain recent highs, coupled with falling below key support levels, underscores the likelihood of continued downside pressure. However, fundamental factors, including upcoming US economic data and Federal Reserve commentary, may provide short-term volatility and possible relief if inflation expectations cool. As traders monitor these events closely, Gold's long-term resilience remains dependent on the trajectory of the US dollar and future policy signals.