Charting Gold’s Path: Resistance Tests and Bullish Breakout Signals

Gold Forecast Video for 22.12.23 by Bruce Powers

Gold further tests resistance near the top of the current advance as it breaks out from Wednesdays inside day pattern. The top of the trend was 2,048 and today’s high was 2,046. It sure looks like gold wants to progress higher, but it needs to first trigger an advance above 2,048 and then close above that price level to confirm strength.

Initial ABCD Pattern Target is 2,091

The initial target from the current rally is up around 2,091. Once reached, that target completes the rising ABCD pattern as shown on the chart. Interim price levels are marked lower but they may be busted through relatively easily. Of course, this assumes the bullish momentum can be sustained or accelerated. Gold managed to rise back above its 20-Day MA six days ago and the moving average continued to reflect support following that rise. Gold is set to continue higher, but it first needs to break out above 2,048 and then keep rising. However, that may not occur until next week.

Momentum Should Trigger Again on Weekly Breakout

This week is on track to complete an inside week where this week’s trading activity happened at prices also traded last week. An upside signal is needed to trigger a weekly bullish breakout and therefore a continuation of the rally. Last week’s high was 2,048 and this week’s high is 2,047. Certainly, a bullish breakout can occur tomorrow on Friday, but if not, it can be anticipated for next week.

Although the 20-Day MA has been acting as support in recent days, until there is a rally above last week’s high that support zone remains at risk of being tested as support. If so, it could fail to hold as support and lead to a deeper bearish retracement.

Monthly Bullish Breakout Signal Earlier this Month

Earlier this month, a monthly continuation bullish breakout occurred on a rise above last month’s high of 2,052. A monthly close for December above November’s high would confirm the strength of the breakout. Further, a monthly close above November’s close of 2,036 would indicate greater strength than if the close is below that price level. Either way, a monthly breakout occurred, which is bullish for the lower weekly and daily time periods.

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