Gold Price Forecast: Bulls Eye Breakout Amidst Low Volatility

Gold Forecast Video for 09.02.24 by Bruce Powers

Once again gold decided to test support at the lower end a small symmetrical triangle pattern, bordered in purple. Today, was the fourth touch of the line. Price was rejected to the upside as buyers stepped up and took control again. This resulted in a possible bullish hammer candlestick pattern forming for today. Therefore, a bullish breakout triggers above today’s high of 2,040. Gold may then encounter minor resistance at 2,045 but should bust through if it is going to have a chance to rise further in the immediate future.

Diminishing Volatility May be Coming to an End

The symmetrical triangle helps illustrate that gold has been stuck within consolidation for over two weeks. It coincides with the convergence of the 20-Day and 50-Day MAs. A bullish breakout of the triangle has failed so far, while multiple tests of support at the lower boundary line of the pattern further highlights the uncertainty.

Nevertheless, recent price action shows diminishing volatility. What follows is typically an increase in volatility or a trend, of some degree. The monthly chart further illustrates the low volatility environment. Trading in gold for February remains within the range of January, and January was contained within the range of December.

A Breakdown Triggers Below 2,015

Key near-term support is at this week’s low of 2,015. If gold falls below that level and stays there, the risk of lower prices increases. However, if that occurs, the nearby 2,009 and 2,002 minor swing lows should be breached rather quickly. The 78.6% Fibonacci retracement s at 1,998. It is followed by a swing low at 1,973.

Initial Upside Target of 2,117

On the upside, once the 2,045-price level is cleared gold heads toward the recent swing high at 2,065. A daily close above 2,065 further confirms a bullish reversal of the recent correction. The prior swing high at 2,088 is then the next higher target followed by 2,117. A rising ABCD pattern targets the 2,117-price area as an initial target. An extended target for that pattern is at 2,249 and it is joined by a 127.2% extension of the decline from the May 2023 peak.

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