Gold Price Forecast: Key Levels to Watch for Bullish Reversal or Deeper Retracement

Bruce Powers
Published: Aug 3, 2023, 20:04 GMT+00:00

Gold's decline completes a Fibonacci retracement, while potential support and resistance levels offer insights into future moves.

Gold, FX Empire

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Gold Forecast Video for 04.08.23 by Bruce Powers

Gold continues its pullback, falling to a new retracement low before finding support at 1,929. Today’s decline completes a 61.8% Fibonacci retracement. What happens next will be revealing. A drop through today’s low has gold heading towards potential support around the lower uptrend line, along with the 127.2% Fibonacci extension of the falling ABCD pattern around 1,922. Alternatively, a daily close above today’s high of 1,939 might complete the retracement. Today’s range is relatively narrow reflecting a slowdown in bearish momentum.

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Prior Support Tested as Resistance

Today’s high of 1,939 tested resistance of the 100-Day EMA, which gold fell below yesterday. The 100-Day line has been recognized by the market on multiple occasions over the past 10 weeks as either support or resistance. It deserves to be watched carefully going forward. Currently, it is at 1,941. In addition to gold dropping below the 100-Day line it has also fallen below the two internal uptrend lines, closed below them yesterday and will do the same today.

Drop Below Lines Short-Term Bearish

Daily closes below both lines are short-term bearish until proven otherwise. It opens the door to a deeper retracement. A drop below today’s low has gold heading towards the lower trendline along with the completion a 127.2% Fibonacci extension of a falling ABCD pattern at 1,922. Lower still is the significant 200-Day EMA at 1,907.

Weekly Reversal Needed to Restore Confidence to the Bulls

A potentially bullish reversal is first indicated on an advance above today’s high of 1,939, followed by a daily close above the 100-Day EMA. Subsequently, an advance above Thursday’s 1,955 high further confirms strength. A weekly bullish reversal triggers on a move above this week’s high of 1,972. Notice that the significant 100-Day EMA and weekly high matches, along with the internal downtrend line.

What this tells us is that a weekly bullish reversal would provide a breakthrough resistance identified by several methods. Also, it would be the fourth attempt to break above the 100-Day EMA. Many times, the fourth attempt through a line is successful. We’ll be watching closely for clues supporting such a scenario. Once a bullish reversal confirms and gold moves back into an uptrend, higher prices are likely, including the possibility of record highs eventually.

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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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