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Gold Forecast Video for 09.10.23 by Bruce Powers
Gold shows strength as it rallies to a four-day high following an initial bearish drop to a new retracement low earlier in the session. The low of the day was 1,810. An outside day has been established reflecting a change in sentiment to bullish from bearish within one day. Gold is set to close strong, in the top third of the day’s range. Where is closes relative to the highs of the past few days will also be telling. Yesterday’s high was 1,829, while the day before hit a high of 1,831, and the day before that there was a peak for the day at 1,833. At the time of this writing gold is trading above one of those highs, at 1,831.
Bulls Watching Retracements to Prep for Rally
Today’s price action could mark a bottom that leads to a healthy rally. Therefore, traders will be watching retracements for bullish setups. Note that the current bottoming formation takes the form of an expanding triangle. This is easier to see on an intraday chart (see 30min chart). What this means is that intraday volatility during pullbacks may be greater than normal.
Expanding Triangle Bottom?
The expanding triangle is a form of consolidation and price discovery where the boundaries of the pattern are marked by lines that are headed away from each other and will never cross. This means that on a breakdown to new trend lows gold may stay within the boundaries of the expanding triangle consolidation yet provide a bearish trend continuation signal. Subsequently, price rallies and again tests the highs for an upside breakout and bullish trend continuation.
Decisive Breakout of Today’s High Points Gold Higher
Heading into next week, an upside breakout is triggered on a move above today’s 1,835 high. Yet, if the expanding triangle remains in play, it may be a false breakout as the consolidation pattern expands, as it is supposed to. Regardless, if price keeps rising and confirms a breakout of the triangle, gold heads the prior swing low around 1,885. That price area is followed by 1,893 and 1,901. Lower price levels are seen with the Fibonacci retracements shown on the chart.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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