Gold Price Forecast: Holds Strong Above Support, Uptrend Intact

Gold continues to hold above support around the 8-Day MA indicating that the near-term uptrend remains in place. That dynamic support trend indicator was only breached once in any meaningful way on Monday, but quickly rebounded. You can see how the 8-Day line was initially recognized by the market early in the current swing following the breakout from March 20. This also means that a decisive decline below the 8-Day MA may provide an early bearish signal for when a retracement may be starting. Of course, any signal should be further confirmed by additional confirmation signals.

Holding Above Support Zone

In addition to gold holding above the 8-Day line, it has also been successfully testing support around the two upper channel trend lines that previously identified resistance and now support. This is a sign of strength that shows continuing demand for gold. Today’s price action is on track to complete as an inside day. Therefore, a move above the high of 2,393 will provide the next sign of strength that could see prices rise further. Nonetheless, a breakout above this week’s high of 2,398 is needed for greater confidence that the price may continue to rise from there.

Trading Within Last Friday’s Price Range

Bullish momentum in gold has slowed since the new record high of 2,431 was hit last Friday. That high was followed by a bearish decline, which ended near the lows of the day. It has characteristics of a short-term blow off top. Nevertheless, there has not yet been bearish follow through, which is supportive of the bullish view. But this means that gold may rise above this week’s high yet remain within the wide range from Friday. Therefore, there will not be a clear bullish trend continuation signal given on the daily chart until the 2,431 level is triggered.

Weekly Setup Likely for Next Week

Since Wednesday’s trading is almost complete, it is likely that gold will finish the week with an inside week. If so, it will set up a potential inside week breakout to trigger a bullish continuation. That should provide a more reliable indication of strength than a daily breakout this week. It also means that it is not likely to move to new trend highs this week.

For a look at all of today’s economic events, check out our economic calendar.