Navigating Gold’s Uptrend: Key Levels and Potential Resistance Ahead

Bruce Powers
Published: Dec 7, 2023, 21:20 GMT+00:00

Gold hints at a bullish reversal but further confirmation of strength is needed, signaling a cautious optimism in the market.

Gold bullion, FX Empire

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Gold Forecast Video for 08.12.23 by Bruce Powers

Gold signaled a potential bullish reversal off the recent 2,010 as it broke out of the inside day from yesterday on a rally above 2,036. However, resistance was quickly seen at 2,040, just shy of the three-day high at 2,041. Upward momentum was not as strong as it could be as gold is set to end the day below yesterday’s high. Nevertheless, it provides the beginning of a rising trend with a higher daily low and higher daily high.

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Trendline Points to Support for the Trend

Once again, the internal uptrend line is identifying support on the way up. This is telling us to pay attention to gold’s relationship to the trendline and daily lows. A break below today’s low of 2,020 will signal a likely decline to below the line and a daily close below 2,020 confirms the short-term bearish signal. Until then the uptrend can be anticipated to continue with a rise above today’s high providing the next sign of strength.

Areas for Possible Resistance

Areas to watch for resistance start around 2,052. There are two prior swing highs further up that may cause some selling pressure. The first is around 2,070 and the second at 2,082. Each of the two prior swing highs encountered strong resistance in the past that led to prolonged corrections.

It remains to be seen if gold can retain strong enough demand to test the recent high of 2,135 without a deeper retracement or consolidation. So far having each of the past two days successfully test support of the line and the break above yesterday’s high, point to a continuation of the current uptrend. This is why today’s low price is important, until we get additional price action.

Drop Below 2,010 is Short-Term Bearish

A drop below today’s low is short-term bearish and puts the recent swing low of 2,010 at risk of being broken. If this occurs potential support includes the 21-Day MA at 2,000, a prior swing high at 1,987, and the 78.6% Fibonacci retracement at 1,975. Last week’s advance triggered an upside breakout on the monthly chart. We’re now experiencing a pullback from that breakout. Since the monthly chart covers a longer time frame the breakout into new highs is significant and increases the chance for an eventual resolution to the upside for gold.

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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.