Gold Forecast Video for 10.11.23 by Bruce Powers
Gold looks to at least have found short-term support upon reaching today’s low of 1,945. A bounce followed that has seen it advance back to the top third of the day’s range, a sign of strength. The next key potential resistance levels are around 1,970 and 1,978. A prior swing high and daily high mark the first level and a trendline break and the three-day high point to the second level.
Bounce off Key Support Zone
Today’s low has bounced off an identified support zone that ends at a low of 1,947. Given the subsequent bullish reaction the zone rejected price to the upside. If gold closes in the top half of the day’s range, there is a good chance for the bounce to continue higher and test resistance of the levels notes above. Whether today is the completion of the retracement though is another matter.
Similarity to Initial 2022 Advance
Following the 2,009 trend high reached two weeks ago, gold moved into a retracement. It has been coming down rather slowly and today’s low completes a relatively shallow retracement. If a rally continues to contest recent highs, then the shallow retracement before a bullish reversal showed strength. Nonetheless, it looks like there is a good chance for gold to test lower targets before it is complete.
Shallow Retracement Shows Strength, but is Retracement Over?
The recent advance in gold was 11.0% in 15 days following the October 6 bottom. That is a relatively rapid ascent and a retracement to at least the 38.2% Fibonacci retracement remains a possibility following a bounce. The 38.2% retracement is at 1,933. It sits near the 50-Day EMA, which is a little higher at 1,938. Together, they can be watched as a potential support zone if gold keeps falling.
Of course, a continuation of today’s bounce opens the possibility that the uptrend may continue from today’s low into new highs eventually. The initial leg up for the uptrend that began from the November 2022 lows reached a high of 1,787 before completing a 38.2% retracement and then rocketing higher.
That November peak completed a 10.5% advance, not too different from the 11.0% rally recently. Gold went on to rise another 13.7% from the retracement low, to peak out at 1,960 at the beginning of February this year. For now, the expectation is for a similar bullish reaction following the completion of the current retracement. Further, the 38.2% retracement is the maximum decline anticipated currently, unless proven otherwise by price action.
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