Gold’s Uncertain Path: Trapped in Thursday’s Range, Key Signals Await

Gold Forecast Video for 31.07.23 by Bruce Powers

Gold pauses as it trades inside Thursday’s price range. Although gold is positive for the day it is contained within the prior day’s price range and needs to get out of that range before additional technical clues are offered. Thursday’s range is relatively wide so gold could trade within that range for a couple weeks.

Daily Close Through a Trendline Indicates Change

This is because there are two trendlines that cross around August 17. One is a downtrend line that touches Thursday’s high and the other a rising trendline beginning from the June low. The latest gold will break through one of those lines is August 17. A daily close through either of the lines will indicate a change may be coming. Follow through is key.

Deeper Retracement Risk Remains

Thursday’s range is relatively large with a high of 1,982 and a low of 1,943. The low tested support above the 50% retracement and 100-Day EMA. If gold continues to retrace to below Thursday’s low, it still has potential support of the 100-Day ema and 50% retracement at 1,941 and 1940, respectively. A little lower are the uptrend lines around 1,937 that mark support of the uptrend.

Today we see a bounce in gold off those lows that brought it back above the 34-Day EMA and it should close above it today. Given gold’s behavior around the 34-Day line over the past couple of months, where it was recognized as support of resistance on multiple days, getting back above the line and staying above it would be a minor bullish indication.

Unconfirmed Bullish Monthly Breakout

July ends on Monday. Last month’s high was 1,983.50. Gold triggered a bullish monthly breakout on July 20 to reach a high of (July high) but did not close above that high. Therefore, the breakout has not been confirmed. The subsequent selloff, which gold remains in today, is not bullish behavior as demand dissipated quickly on the breakout day and bearish price action followed. Since gold remains above the 100-Day EMA and uptrend lines are set to continue to advance higher once the retracement is complete. Nevertheless, there is always a chance of a more aggressive sell-off that takes gold below the support levels, and we need to be prepared for that as well.

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