Breaking Resistance: Gold Surges on Strong Demand and Technical Patterns

Gold Forecast Video for 13.07.23 by Bruce Powers

Gold surges through resistance and keeps going. Following a lower-than-expected U.S. consumer price index (CPI) report, which measures inflation, gold takes off, exceeding last week’s high (1,935), busting above the 34-Day EMA trend indicator (1,945), and completing a standard ABCD pattern (1,945). Plus, on a weekly basis gold exceeded the four-week high around 1,959. If it can close above that high another bullish confirmation will have occurred.

Monthly High at 1,985 is Targeted

Following that high there are four weekly high targets in quick succession starting with 1,971. A daily close above each is an additional sign of strength. However, a daily close above the top level at 1,985 will be the more significant weekly high as it is the top of a range of weekly highs. More important is the nearby monthly June high of 1,983. Once that level is exceeded gold will have confirmed its bullish reversal on all time frames; daily, weekly, and monthly.

ABCD Pattern Extending to Higher Targets

The ABCD pattern noted above has been extended to include the 127.2% Fibonacci extension of the CD leg of the pattern, as it also completed today at 1,956. At the time of this writing the high of the day is 1,960. The next higher target for the ABCD pattern is the 161.8% Fibonacci extension of the CD leg, which targets completion at 1,971.

Decisive Breakouts Show Strength

Today’s decisive breakout above multiple levels shows strength and growing demand in the precious metal. Signs of strength are building, and it looks like there could be more to come shortly. The bigger picture in gold remains bullish and today’s price action further confirms the completion of its recent retracement. The long-term uptrend is starting to kick in again. Starting off the November bottom last year, gold has had two advances and two corrections. The second, finishing its bottom earlier this month.

Long-term Uptrend Remains Bullish and Targeting New Highs

Given the potential for a continuation of the trend into new record highs for gold, current and recent prices may be the lows for some time. Today’s aggressive rally is sure to draw more market participants into gold and sustain this rally. Nevertheless, weakness can be seen as an opportunity to look for new bullish entries to take advantage of what could be a memorable rally in gold.

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