Gold Faces Potential Monthly Bearish Pattern as Price Struggles

Gold Forecast Video for 27.04.23 by Bruce Powers

Gold tried to go higher earlier today, with an advance to a four-day high, but quickly failed and once again tested support of the lower short trendline. The next test of that line could fail as it has been tested as support for five of the past six days. Gold remains in consolidation and still trading inside last week’s range.

Short-Term Support Zone

A drop below this week’s low of 1,974 is a sign of weakening and triggers a decline below the lower trendline of the channel. However, since this week’s candle is still forming a drop below last week’s low of 1,969 provides a more confident bearish signal until this week is over. There is then a support zone going down to the 1,950 area. That was a weekly low in the past.

A drop below 1,950 provides further evidence for the bears. In this case, the next lower target is the completion of a 50% retracement at 1,929. Also, keep an eye on the larger uptrend line for signs of support should this bearish scenario unfold. Nonetheless, the bigger picture for gold remains bullish. If gold stays above the larger uptrend line during a correction, the bullish outlook remains.

Short-Term Bull Case for Gold

If gold continues to hold above support of last week’s low, it has a chance to attempt to complete an ABCD pattern at 2,083. But first it will need to surpass the record high of 2,070 from March of 2022. At this point, a rise above this week’s high of 2,009 is a sign of strength. Yet, a daily close above the two-week high of 2,015 is needed to provide confidence that gold may be able to keep rising.

Potential Monthly Bearish Candlestick Pattern

Trading for the month of April is complete at the end of the week. So far, it looks like gold could end the month with a bearish shooting star monthly candlestick pattern, where price closes in the lower half of the months range or in the lower 25% of the range. Something to keep an eye on as we head into next week as a drop below this month’s low of 1,950 after April triggers the breakdown of the monthly candle.

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