Last week the gold futures closed with a very strong green candle that this week I was expecting a continuation and a breakthrough above the flag channel line. However, during the week, the price was strongly rejected at the upper boundary of the flag (that is coincidently the 100 MA) and instead of an expected continuation sign, the weekly candles produced a Bearish Harami, a rather strong warning that requires a confirmation.
While weekly candles signal the bearish pressure, the daily ones are somewhat optimistic, at least for the short term. There is a mix of signs and I view the next week as a neutral, possibly following a pattern two months ago when the price was bouncing between the daily 50 and 100 MA until it finally broke down. This time, the price could be bouncing between daily 100 and 200 MA. If price breaks down again, the next level of support would be the weekly 100 MA in the area of 1650. I marked the possible formations with the two symmetrical black angles on the Daily Candles chart.

Gold Futures – Weekly Candles

The weekly chart shows a certain bearish pressure. A rejection at the upper boundary of the channel, the bearish 8/20 EMA cross and the Bearish Harami combo of the last two weeks candles. If the next week produces a red candle, the bearish trend is likely to continue. If the next week breaks through the upper boundary with a solid green candle, there would be a good chance for the bullish trend to settle.
The stock seems to be sitting at an inflection point and either direction could have a long way to go.
Possible wave targets.
Bullish scenario:
– Wave 1 target – 2050-2075. Timing – Jan-Feb.
– Channel – very preliminary.

Bearish scenario:
– Wave (C) target – 1650
– Early January up to multiple months, depending on the wave structure.

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