Navigating Gold’s Path: Resistance, Retracement, and Future Outlook
Gold Forecast Video for 31.08.23 by Bruce Powers
Gold completed a 61.8% Fibonacci retracement today and it also popped briefly above the downtrend line. It is on track to close at resistance of the line. Today’s high was 1,949, which also put gold above the four-week high of 1,947. A daily close above that high is now needed to confirm strength and increase the chance for gold to continue higher.
Market Recognizes Downtrend Line as Current Resistance
Nevertheless, resistance was seen today, which could lead to a pullback or consolidation. Today’s close will not likely be above the four-week high and the market looks to be recognizing the downtrend line as resistance. Further, gold is looking like it may close the session weaker than it could, near or below the halfway point of the day’s trading range. The halfway point is price level is at 1,942.
Support for Near Term Crucial Above 34-Day EMA at 1,931
If a retracement occurs prior to a breakout above today’s high a bullish scenario is retained if support is found above the 34-Day EMA, currently at 1,931. You can see how the 34-Day line was either support or resistance for the past five months or so. Given that natural gas rose above the line yesterday, it would be expected to be support, or support on a pullback should be found higher than the line.
Breakout Above Today’s High Bullish
Certainly, a breakout above today’s high is bullish and signals a likely continuation of the rally. If so, the next target is around 1,965/1,966, consisting of the 78.6% Fibonacci retracement along with monthly high for August, respectively. If a daily close can occur above this month’s high, upward momentum for gold should continue.
Rise Above 1,987 Swing High Sets the Stage for New Record Highs
The most recent swing high of 1,987 from July is a key level as it is part of the downtrend price structure off the 2,082-record high for gold. Once gold can close back above that level it will next be set to test the record high and possibly exceed it. When that might happen is the question, and how will gold go about getting there if it is to do so. Generally, financial markets don’t make it easy to figure out what comes next and if it looks obvious technically, many times that is not the way it goes. The same could be the case here, which means to be prepared for different scenarios.
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