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Gold Forecast Video for 25.08.23 by Bruce Powers
Minor upside follow-through occurred in gold today as it breaks above yesterday’s high of 1,920 before finding minor resistance at today’s high of 1,923. Today’s high was close enough to complete a 38.2%, Fibonacci retracement, which sits at 1,924. A bullish weekly reversal triggered yesterday on a move above last week’s high of 1,916.
First Week in Five That Gold Exceeds Prior Week’s High
This is the first week in five that gold was able to rally above the prior week’s high and close above it on a daily basis. It is a sign that the retracement off the 2,067 peak is likely complete. Since gold is on track to close above its 200-Day EMA for the second time today a pullback should find support at or above that line for gold to show strength. It is currently at 1,908. A pullback is normal, yet how far the pullback drops and the time to recovery can provide additional insight into the underlying demand or lack thereof.
200-Day Line Should Now Act as Support
A daily close below the 200-Day line puts the recent upside breakout into question. The 200-Day EMA is a significant long-term trend indicator. It was resistance for six days recently before it was busted to the upside yesterday. The breakout and subsequent upside advance ended with a large range day and daily close near the highs of the day, which is bullish. It should lead to additional upside. However, patterns can fail and the first sign of possible failure in gold would be on a daily close below the 200-Day line. Otherwise, gold can be expected to continue to rally up into the downtrend line.
Price Targets: 50% Retracement at 1,936 and Weekly High Near 1,948
A move above today’s high of 1,923 signals a continuation of the rally. Gold then heads up towards the 50% retracement at 1,936, followed by the 61.8% Fibonacci retracement along with a weekly high around 1,948. However, after today you can see how the downtrend line will be encountered prior to reaching 1,948. It may act as resistance or price could busted right through it.
Nonetheless, the more significant trend line is the uptrend line drawn from the November swing lows. Just like the 200-Day line, it was previously defined support and is now to be tested as resistance. If the current bullish reversal has legs, then that line will also eventually be busted to the upside.
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
