SPDR Gold Trust (GLD)

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Gold Triggers Weekly Breakdown
By: Bruce Powers | June 26, 2024

• Gold's bearish flag and shooting star patterns suggest a likely drop below the recent swing low of 2,287, with key support levels at risk.

Gold triggered a bearish flag on the daily chart today and a shooting star on the weekly chart. The bear trend patterns point to a likely drop to below the recent swing low at 2,287. Previous support around the prior swing low from May 3 will likely follow and is at risk of being broken to the downside. At the time of this writing gold has reached a high of 2,324 today and a low of 2,294. But trading continues near the lows of the day and the daily low may be lower before today’s close.



Initial Downside Target at 2,262

Today’s decline also opens the possibility that gold reaches the downside target of 2,262. Falling to that price level will complete a 61.8% Fibonacci retracement of the uptrend begun from the February swing low. Interestingly, the 20-Week MA aligns with support of the 61.8% Fibonacci retracement level. However, a more significant target zone lies lower near the uptrend line.

That line is the bottom of a rising parallel trend channel. Gold is in the process of failing to hold strength near resistance at the top of the rising channel. Once resistance is seen at one side of the channel, a reversal back to the other side becomes possible. Therefore, if a drop below 2,277 occurs, a lower support zone starting around 2,211 and including the price area of the uptrend line is next on the agenda. The 78.6% Fibonacci retracement completes there.

Bearish Moving Average Crossover Provided a Clue

The recent bearish crossover of the 20-Day MA falling below the 50-Day further confirms weakness and the bear trend. Moreover, a weekly bearish reversal triggered today, and it is supportive of a deeper retracement to test lower support levels. Unless there is a relatively rapid recovery to the upside, gold is facing at least one to two weeks of down to sideways price action. Either way, a rally above the 50-Day line at 2,340 would be the first sign of strength. However, a rise above the recent interim swing high of 2,369 would be needed for a bullish reversal signal at this point.

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