Gold Price Forecast: Upside Potential Despite Resistance

Gold Forecast Video for 08.02.24 by Bruce Powers

Gold attempted to continue higher on Wednesday earlier in the session but has since stalled out. It is on track to end today’s session with a doji following an advance above yesterday’s 2,039 high. The advance triggered a breakout of an inside day, and it was also able to rally above the two-day high of 2,042. Resistance was seen at 2,045, as price was rejected around the uptrend line. Notice that Monday’s high also found resistance around that line. Support, at the day’s low of 2,031, was at the top of the small pennant consolidation pattern (purple boundary) and the 20-Day MA.

Gold Remains in a Precarious Position

What this tells us is that gold remains in a precarious position as it tries to get going to the upside. Rather, it continues to chop around leaving a concern that key support areas may yet be busted to the downside. That doesn’t look like the most likely scenario currently, but it remains a possibility as there are little signs that demand is improving in the near-term. Nevertheless, gold continues to show small signs of strengthening that should lead to further strengthening.

Decisive Rally Above Wednesday’s High is Needed

A decisive rally above today’s high, followed by a daily close above it, will start to provide some clarity. Gold would then be back above the trendline and that would reflect increasing demand following today’s inside day breakout. The most recent swing high at 2,065 would then be the next target with an expectation that it should be easily exceeded. Point B on the chart marks the next higher target zone at 2,088. Further, an initial primary target is derived from the rising ABCD pattern. It completes at 2,117 and identifies the next likely higher target zone above the swing high at B.

Trading Remains Near High End of Long-Term Price Range

It is also important to review the current location for gold on the chart relative to a key long-term price level. Gold has been largely trading around a key price level of 2,031 (light blue line) more recently. That was the record swing high price reached in August 2020. The level defines the top range of price action since then. Interestingly, it is a close match for today’s low. Further, each of the past three months closing prices have been above the 2,031-price level.

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