Gold’s Uptrend Line Tested as Support: Will It Continue to Rally?
Gold Forecast Video for 31.05.23 by Bruce Powers
Gold further tests the uptrend line as support as it dips below the line briefly early in the session to a new trend low of 1,932, before rallying to a three-day high. It is on track to complete the day at its highest daily close in at least four days. Support around the uptrend line is strengthened by its convergence with the 50% retracement and completion of a falling ABCD pattern with the CD target extended by 127.2% (1,943).
A Drop Below 1,932 is Bearish
Nevertheless, a drop below today’s low of 1,932 triggers a bearish trend continuation. Gold would then be heading to the 61.8% Fibonacci support zone at 1,912. Near that price zone is the completion of the ABCD pattern with the CD target extended by the golden ratio of 161.8% at 1,915. Further down is important support of the 200-Day EMA at 1,885.
Gold Rising into Several Resistance Areas
Gold will be approaching several potential resistance areas on the way up if it can keep going. First, is the prior swing low from mid-April at 1,969. A little higher is the 34-Day EMA at 1,979, followed by a weekly high at 1,985 along with the 38.2% Fibonacci retracement at 1,989.
Rising Trend Channel Intact
The dominant pattern in gold is a rising parallel trend channel. Price was just rejected off the lower trendline of the channel and is strengthening from there. This is where support would be expected to be seen if the rising trend is to continue. Note that there have been two legs up so far off the September swing low. A third at a minimum is likely. If true, then the bottom of the current retracement is going to be the lowest price for gold before it sets up to run to new highs again. Nevertheless, this could take some time.
Symmetry with Prior Correction
The prior correction in gold off the 1,960-swing high was 7.9%, while the current retracement has been 7.2%. That is close enough to open the possibility that today’s low price could be the end of the correction. A daily close above the weekly high of 1,985 will confirm strength.
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