When Gold stood at $1,641 an on ounce on 8/3, the “Power of the Pattern” was suggesting that Gold could reach the $1,900 level, due to Fibonacci and channel resistance (see Fib target post here)….(see 8/3 post targeting $1,900 here) In a matter of 20 days, gold gained over $200 per ounce and last week hit the $1,900 level, then it backed off almost $200 in a matter of days.
After the decline, gold then rallied quickly, erasing a good percentage of that decline. In time, yesterdays price action and price level could end up being very important for Gold.….see why below.
CLICK ON CHART TO ENLARGE
It appears that channel resistance line (1) and Fibonacci resistance (see 30 year Fib resistance here) did have an impact on Gold last week. Did its long-term up trend break, with the $200 decline last week? No! Did the shorter-term trend change with the decline? Too soon to tell, yet the channel resistance/Fibonacci 261% extension/expansion level did seem to have some influence.
What Gold does right now, after hitting the Fibonacci 61% retracement level is going to tell us a ton, at (2) in the chart above! If gold can’t get above its 61% Fib resistance level and breaks support line (3), the metal should decline a good deal in price!
Keep a close eye on what happens at this “key kiss of Fibonacci resistance!”