Crucial Signals: Gold’s Weekly Breakout and Potential High Targets

Gold Forecast Video for 26.12.23 by Bruce Powers

Gold continued to strengthen on Friday as it exceeded Thursday’s high of 2,048 and is on track to close above that high. Moreover, that high is a weekly high from last week and if gold closes above 2,048 a bullish breakout on the weekly time frame will be confirmed thereby providing another sign of strength and opening the door to higher prices. Nevertheless, in the short-term resistance was seen at today’s high of 2,071, leading to an intraday pullback. That high is almost an exact match with the swing high and prior record high from March 2022.

Support at 50-Day and 20-Day MAs Signifies Gold’s Strength

At the time of this writing gold is on track to close relatively weak, below the halfway point of today’s trading range. However, in the larger picture gold remains strong and on track to attempt new highs again. During the most recent retracement, it successfully tested and held support of the 50-Day MA (orange) at the December 13 swing low. Subsequently, the 20-Day MA was successfully tested as support beginning last Friday. These are bullish signs for gold.

Measured Moves Suggest Potential Higher Target of 2,187

Today we look at recent measured moves to derive a potential higher target for gold. Relative moves and targets are marked with a rising purple line and labeled 1, 2, and 3. The first two moves saw the price of gold appreciate by approximately 199 to 215 points, or 11% to 11.1%, respectively. Since the two moves are almost an exact match the third move (3) may match or exceed the prior moves or swings. The third move starts from the most recent swing low of 1,973 on December 13. It will complete a 214 point or 10.8% advance at a new record high of 2,187. This provides a guide as to what could be possible when gold moves to new record highs.

Certainly, the are plenty of other possible higher targets for gold but this is a relatively simple approach to identify an initial new high target area. And it is not out of reach as the current record high is only a little lower at 2,145. Moreover, that target area is also marked by a 127.2% Fibonacci extension of the bearish retracement begun from the May 4, 2023, swing high.

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