Gold Breaks Out of Inside Day: Bullish Momentum Building

Bruce Powers
Published: Nov 3, 2023, 20:18 UTC

Amid strong upward movement, gold targets a breakout above the trend high, setting the stage for a possible new record monthly close in November.

Gold bullion, FX Empire

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Gold Forecast Video for 06.11.23 by Bruce Powers

Gold broke out of yesterday’s inside day today on a rise above 1,991. It subsequently reached a three-day high of 2,004. A daily close above 1,991 will confirm the inside day breakout and a close above the three-day high of 1,984 shows further strength. Further, for the short term, a daily close above the middle of today’s range around 1,994 will show greater strength than a close below that level.

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Short Term Bullish Price Action Needs to See Follow Through

The point of today’s bullish price action should be an eventual breakout above the trend high of 2,009. Following a sharp 10.3% advance in 10 days, gold has been progressing in a small ascending trend channel as it teases a rise to the next target zone. That zone is around 2,024 to 2,041. Given the current positioning of the channel, gold could continue to maintain that pattern and still reach the next higher target zone.

Inside Week Consolidation Forms This Week

Gold will be completing an inside week this week with a potentially bullish hammer candlestick pattern setting up. Therefore, a breakout above this week’s high of 2,008 is bullish. However, since the trend high is close around 2009, the higher level should provide a more reliable level for a signal. A breakout of the trend high will also trigger a monthly breakout. Although we are at the beginning of the month, such a move opens the door to a possible record monthly close for gold in November. Previously, the highest monthly close was 1,989 in April of this year.

Bullish Momentum in Current Advance Sustained

Since the bottom of the retracement last month gold has been rising rapidly reflecting the enthusiasm of buyers. There is no sign yet that has changed. However, it might start to change on a drop below today’s low of 1,983. That would reflect a failure of today’s upside breakout. Therefore, there would likely be a continuation of the decline towards lower potential support areas. The first would be the three-day low at 1,970. If that low is broken to the downside, there is a support range from 1,953 to 1,947. Still lower is the 38.2% Fibonacci retracement at 1,933.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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