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Weekly Chart Signals Bullish Reversal for Gold’s Price

By:
Bruce Powers
Published: Sep 1, 2023, 20:18 GMT+00:00

Gold's rally hit a roadblock at $1,953, but a bullish reversal on the weekly chart signals potential upward momentum.

Gold, FX Empire

In this article:

Gold Forecast Video for 04.09.23 by Bruce Powers

Gold tried to continue its rally earlier in the session today with an advance above the prior trend high of 1,949 but encountered resistance at 1,953. The breakout failed as gold subsequently sold off and fell to a three-day low of 1,934 before bouncing. It is set close weaker than it might, in the lower half of the day’s range.

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Bullish Reversal on Weekly Chart

Nevertheless, gold confirmed a bullish reversal on its weekly chart this week with a daily close above last week’s high of 1,923. This is only the first week of the reversal, which should eventually lead to a bullish continuation higher.

Continuation Higher Next Targets 1,965 Price Area

A bullish trend continuation signal occurs on a move above this week’s high of 1,953. If gold continues to strengthen from there, it should reach the 78.6% Fibonacci retracement around 1,965. However, in the short term we could see further consolidation of a pullback. If it does so, we’ll first be watching the area of the internal uptrend line along with the 34-Day EMA at 1,927 for signs of support. Of great significance will be possible support above the 200-Day EMA, currently at 1,909.

Support Areas to Watch

If a retracement finds support at or above the 34-Day line it would be a stronger bullish indication for the price of gold than if it drops below the 34-Day line. Also, if a bullish reversal occurs a little higher, off support of the internal uptrend line, gold will be showing greater short-term strength than if it dropped to the 34-Day line. Today, the two lines identify a similar possible support level. However, on Monday the price indicated by the 34-Day EMA will be slightly lower than the trend line.

Gold has been testing resistance of the longer downtrend line for the past several days. It has risen above the line each day yet has subsequently closed at or just below the line. This shows upward pressure remaining and confirms a key pivot zone. A breakout higher could lead to an accelerated move, or resistance around the line first leads to further consolidation or a retracement.

For a look at all of today’s economic events, check out our economic calendar.

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.

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