Gold market analysis

"Gold Price's 4th Wave Correction Points to $3,656" 17/9/2025 10:02 Completed 

Yesterday, the gold price broke through $3,700, reaching a new historical high of $3,703. However, on the hourly chart, it formed a double-line reversal pattern and closed at $3,686. Although it did not technically form a bearish engulfing pattern in terms of numbers, the double-line reversal was a relatively strong signal of a potential decline. Subsequently, the gold price dropped sharply to $3,679 at one point, but then gradually climbed back up. 

This morning, the gold price once reached as high as $3,695.35, but it showed a bearish pattern of a bearish engulfing pattern on the hourly chart and a clear descending flag formation. The decline then intensified, and it dropped to $3,676.87 before stabilizing around $3,680. Measured by the Fibonacci extension line from the new high last night, if the extension reaches 100%, the gold price will fall to $3,671.29, which is the minimum decline target for today. If the decline reaches 50% of the maximum increase from September 15 to 16, the gold price could reach $3,665. 

If the trend since September 11th is analyzed using the Elliott Wave Theory, yesterday's high point has met the requirement of the third wave being 1.618 times the first wave. Currently, it is in the fourth wave correction, with the target of the decline being close to but above the top of the first wave (or the starting point of the second wave) at $3,656.67. After that, the fifth wave of the impulse will be launched, and for the time being, the top of the third wave at $3,703 is set as the target. However, regardless of this, after the fifth wave ends, an ABC correction wave against the entire impulse will be initiated, and the start of a higher-level third wave will be marked by a break below the bottom of the fourth wave. 

In short, the current downside targets are $3,671, $3,665 and $3,656. If the Fibonacci extension is used to measure the hourly chart's trend, then $3,662, which is the 1.382 extension, and $3,656, which is the 1.618 extension (exactly the top of wave 1 or the starting point of wave 2), should also be noted. These are all important support levels for the downtrend. Looking at it from Gann's square, $3,660 is at the 270-degree vertical angle, which is a strong support or resistance level. The aforementioned $3,656 is close to this level, so it is inferred that $3,656 is the ultimate support level for this downtrend. Whether the gold price will reach a new high or enter a deeper correction wave in the future depends on the outcome of the Federal Reserve's interest rate decision tonight and its assessment of future inflation, employment and economic performance. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu