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Gold Struggles Below Key Moving Averages
By: Bruce Powers | June 28, 2024

• Gold struggled against resistance at 2,340 and declined to 2,319, forming a bearish shooting star pattern for Friday..

Gold challenged resistance around the 50-Day MA earlier in Friday’s trading session but failed to retain the advance. Resistance was seen at 2.34 and was followed by a decline. As the end of the week approaches gold continues to trade near the lows of the day. At the time of this writing the low was 2,319. It is on track to close the day with a bearish shooting star candlestick pattern.



Resistance Seen Again at 20-Day MA

Heading into next week, unless gold can get back above this week’s high of 2,340, it is pointing to lower prices. The 20-Day MA crossed below the 50-Day MA three weeks ago signaling a weakening trend. Further, all this week the 50-Day MA acted as an area of resistance and today’s downside reaction further confirms that resistance. Both moving averages are angled down.

The May 3 swing high at 2,277 is a key price level as it forms the uptrend price structure of higher swing lows and higher swing highs. A decline below that level, followed by a daily close below it, will confirm a reversal of the bull trend.

Risk of Breakdown from Consolidation Top

The 61.8% Fibonacci retracement is at 2,262 and there may be some support seen around that price area. However, a drop below 2,277 triggers a breakdown of an approximate 8-Week consolidation top. That could lead to an acceleration in the price of gold to the downside towards the next lower target zone around the prior swing high of 2,212. Keep in mind that there is also an uptrend line around the support zone.

`Weekly Bullish Signal Above 2,340

Regardless of the bearish indication of today’s failed attempt to go higher, nothing is clear until there are further signals either confirming weakness or showing strength. A rally above today’s high of 2,340 would show strength and put gold back above the 50-Day MA, which is currently at 2,337. This week is set to close with a weekly high of 2,340 and a low of 2,294. So, a breakout above today’s high will also trigger a weekly bullish reversal. The two-week high is then at 2,369, representing the next potential weekly resistance zone.

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