Gold prices have dropped sharply, testing the critical $4,000 support level after breaching the $4,080 target discussed earlier. The metal opened lower on Friday, creating a bearish gap at $4,040-$4,060, and fell to $4,001.10, challenging the psychological $4,000 barrier. This level is significant as it aligns with a rising weekly support line. Notably, the new bearish gap overlaps with a bullish gap from July 30, adding complexity to the technical outlook. A daily close below $4,036 would confirm the closure of the July gap, while a close above $4,060 would signal the closure of Friday’s gap.
Copper, meanwhile, reached its projected C = A objective near $637 and staged a rebound to $647.58. However, the recovery faced resistance at $650, a critical area near the lower boundary of a weekly rising wedge and a broken short-term consolidation support. The next key levels for copper are $650 and $656. A weekly close below $650 could confirm a wedge breakdown, while a recovery above these levels might signal the end of the correction that began in June.
The broader market also faces pivotal decisions. Other assets are testing key support levels, with some approaching downside objectives and others facing potential double-bottom areas. The weekend will be crucial in determining whether these technical structures hold or break down.
The bottom line is that while several projections have been met, the market’s next moves will be shaped by Friday’s closes. The key levels to watch are $4,000 for gold and $650 for copper, with the potential for significant shifts depending on how these levels are tested.