Although the price of gold has rallied in the short term, a broader technical outlook suggests that the precious metal shows signs of a possible correction.
Analysis indicates that the yellow metal is grappling with resistance within a descending channel as it remains under bearish pressure, driven by both technical indicators and broader macroeconomic influences, according to trading expert RLinda’s TradingView post on November 20.
The expert pointed out that, technically, gold’s price action has confirmed the dominance of a well-defined downtrend channel. A false breakout at $2,627 reinforced bearish momentum, signaling the continued presence of sellers at key levels.
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Gold’s imminent further crash
The recent consolidation below this resistance suggests that further declines are imminent, particularly if the price fails to regain ground above this zone.
A retest of resistance around $2,643 could act as another flashpoint for bearish activity, potentially driving gold toward lower support levels near $2,604 or $2,560.
RLinda noted that the macroeconomic backdrop adds further complexity to the situation.
“Fears of further geopolitical escalation between Russia and Ukraine are likely to subside a bit. In addition, the Fed speech will help determine the U.S. central bank’s future path on interest rates. Attention is focused on the December rate meeting,” she said.
According to the analyst, the downtrend remains dominant, with further declines likely from resistance at $2,627 or the channel’s upper boundary.
“A false breakdown of the local resistance at 2627 is forming. Consolidation of the price below this zone may provoke further decline,” she added.
While a breakout above $2,643 could signal a bullish shift, it would require strong momentum and sustained consolidation—an unlikely scenario in the current environment, according to the analyst.
It’s worth noting that after an impressive run in 2024, gold’s momentum, which was anticipated to push the asset to $3,000, has been derailed following the United States election. Notably, the decline has been mainly attributed to profit-taking and a stronger dollar.
Meanwhile, bulls are anticipating that gold will likely gain further momentum if the situation between Russia and Ukraine escalates, although President Vladimir Putin recently lowered the threshold for a nuclear strike.
As gold looked to drop further, the escalating tension between Russia and Ukraine saw investors react positively to the metal, sending prices higher. As of press time, the metal was up 0.6% in the last 24 hours, trading at $26,48.
Despite the current price movement, Goldman Sachs’s outlook remains optimistic that the metal could see further momentum in 2025, possibly rising to $3,000.
What next for gold?
Looking ahead, technical analyst GPT Hunter noted in an X post on November 20 that after gold briefly dropped below $2,620 at some point following a rejection of the trendline and golden pocket on the two-hour chart, the price is likely to rise to $2,645 before a potential drop to $2,590. However, a close above $2,650 would invalidate this bearish scenario.
The analyst emphasized that ongoing war-related news adds to market volatility.
In conclusion, gold faces bearish pressures from technical and macroeconomic factors, with resistance levels limiting immediate gains. However, geopolitical tensions and a favorable 2025 outlook keep the potential for a rebound toward $3,000 in play.
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