Implications of False Breakdown in Gold

October 18, 2023

by Jordan Roy-Byrne GoldSeek

Amid escalating conflict in the Middle East and its oversold condition, Gold surged higher last Friday to nearly $1945/oz.

That surge occurred days after a bullish intraday reversal from $1823/oz on October 6 and a gap higher on October 7. Then Gold continued higher for a few days before Friday’s explosion.

In September, Gold broke down and lost support at $1900, losing the 40-month moving average and 50% retracement around $1850/oz.

In the chart below, we see how Gold had lost its band of long-term moving averages (side arrow), Gold against the S&P 500 had closed at an 11-month low, and Gold against foreign currencies had closed at an 8-month low.