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    “Gold Nears $3,000 Mark: Risks of Significant Decline Ahead”

    In September, gold witnessed considerable price volatility, reaching new peaks above $2,600. Nonetheless, several technical indicators imply that a correction might be imminent in the near weeks.

    For instance, the forecasting site Gold Predictors has taken a bearish stance. Their analysis suggests that if gold continues its current trajectory without a minor pullback, it could encounter a more significant decline later, as outlined in a post on X dated October 7.

    Since the beginning of 2024, Gold Predictors has tracked a steady uptick in gold prices, with a marked acceleration in September. However, recent chart formations indicate that a retreat might take place in October or November.

    Following an extended rally this year, the analysis underscores that gold has surpassed a consolidating wedge pattern, signaling the potential for continued upward momentum. Nevertheless, a short-term correction towards the $2,500 support level is also possible, after which an upward trend may reestablish itself. Experts noted that minor corrections should be viewed as a routine and healthy part of price fluctuations.

    Gold Approaches a Pivotal Point

    Meanwhile, trading expert Alan Santana remarked in a TradingView post from September 30 that gold is at a crucial juncture and may face a short-term decline. He highlighted that gold has reached the upper boundary of a two-month upward trend and is signaling multiple indicators of a potential pullback.

    Santana indicated that gold is not only at the peak of its channel, but it is also nearing the summit of its Sine Wave progression. He also voiced concerns about the one-day Moving Average Convergence Divergence (MACD) approaching a bearish crossover, which has previously functioned as a solid sell signal in the past four months.

    Considering these elements, Santana foresees a short-term bearish trend with a price target of $2,615, just above the 0.382 Fibonacci retracement level, which has proven to be strong support in recent times.

    Influence of U.S. Presidential Elections on Gold Values

    In examining the factors driving gold’s momentum in September, a trading analyst known as SmartReversals pointed out that its movement is consistent with seasonal patterns, providing insights into possible future trends.

    In a post on X dated September 30, the analyst noted that gold has historically followed specific patterns, particularly during election years under Democratic leadership. This analysis, which incorporates research data from Bank of America (NYSE: BAC), illustrated that gold tends to rise in September when a Democrat occupies the presidency, typically followed by a subsequent correction.

    The analysis speculated that if this historical seasonality continues, gold might soon face a more substantial pullback, potentially jeopardizing its upward trajectory towards the $3,000 per ounce level. This speculation comes amidst concerns regarding Democratic candidate Kamala Harris’s proposed corporate tax hike, which could trigger a stock market downturn should she prevail in November.

    It is crucial to acknowledge that gold has appreciated due to escalating uncertainties surrounding the U.S. economy and growing geopolitical tensions in the Middle East. At the same time, the metal appears to be eyeing the $3,000 milestone after a market surge following the Federal Reserve’s interest rate cuts.

    As a result, a segment of investors, including hedge funds, maintain a positive outlook on gold’s continued rise, with the $3,000 target viewed as an appealing milestone. Conversely, concerns persist that the significant upswing in gold throughout 2024 may be nearing its conclusion, raising warnings of a potential black swan event.

    At the latest reporting, gold was trading at $2,661, marking an increase of over 1% within the last 24 hours. On the weekly chart, the metal gained 0.1%.

    Despite the striking rally in gold, technical indicators suggest a possible short-term correction ahead. Therefore, investors should remain vigilant to historical trends, geopolitical shifts, and economic uncertainties to better gauge potential future movements in gold prices.

    Image Source: tech_BG / Shutterstock

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