Can Gold Break Through Key Resistance Levels to Continue its Uptrend?

Gold Forecast Video for 26.04.23 by Bruce Powers

Gold has been testing support of its short-term uptrend line for four of the past five days. Each time it has been rejected to the upside around the line. In addition, there has been a series of higher daily lows over the past five trading days as the line has been tested. This is bullish behavior so far but until we break a key price level it is not clear what happens next. Nevertheless, gold remains in a small up trending parallel channel or rising flag.

A Bearish Breakdown of Rising Flag Occurs on a Drop Below 1,969

A bearish breakdown of the rising flag occurs on a drop below 1,969. Gold then heads towards potential support of the uptrend line of a large rising channel. However, first watch how it handles potential support around the 1,960 area, as it is marked by several levels including the 38.6% Fibonacci retracement.

Breakout Above Last Week’s High is Bullish

Given the price behavior noted in the first paragraph, gold may continue higher before a deeper retracement occurs. But, given recent behavior a trigger above last week’s high of 2,015 would be needed for confidence that it might keep going after that. Note that the pullback to date found support at 1,969, very close to previous resistance of 1,960 at the February swing high.

The rising flag has seen two key swings so far which are marked as the AB and BC legs on the chart. An obvious continuation of that formation is for gold to move higher and eventually complete the ABCD pattern at 2,083. If that target is reached gold would have surpassed its prior trend high at 2,049 and the record high of 2,070 hit in March of last year.

Potential for Long-Term Breakout

A break above 2,070 is significant as it that move will trigger a long-term bull trend continuation out of a 12-year base. Reaching a new high will put gold on everyone’s agenda if it isn’t already. That should help drive new buyers to the precious metal and provide the interest needed to keep it going. Gold’s current rest prior to its next attempt to move to a new trend high is constructive for the uptrend and improves gold’s chance at a new high breakout.

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