Gold Price Forecast: Channel Support Rejects Price to the Upside

Gold Forecast Video for 20.04.23 by Bruce Powers

Gold pulls back to find support at 1,969 earlier today then bounces. That low provided another test of support off the lower ascending channel trendline and seems to indicate that gold is going to stay within the channel for now.

Bullish Hammer Pattern Forms

Notice that the candle for Wednesday is showing a bullish hammer pattern. A breakout above today’s high of 2,008 will therefore provide a bullish signal for a further bounce towards the top of the channel. Whether it can keep going from there remains to be seen.

Key Near-Term Support

There is a key near-term support zone from today’s 1,969 low and down to the prior swing low at 1,950. Included within that range is a Fibonacci confluence zone around 1,959 and the 34-Day EMA, now at 1,964. If gold falls below the lower price level, it is confirming a bearish breakdown from the rising channel. A rising trend channel can be looked at like a rising wedge. Each is potentially bearish, but a signal needs to occur first. Until then it is just a potential move.

Rising Consolidation Channel

A continuation of the rally off today’s lows could see gold reach new trend highs yet remain within the borders of the ascending channel. For an upside breakout of the channel, a daily close above the trend high and top trendline is needed. Nevertheless, the next higher target for gold is at the prior high of 2,070 from back in March of last year.

The bearish divergence in the 14-Day relative strength index (RSI) provides pause for the possible upside continuation in gold as momentum continues to turn down as price tries to move higher as represented by the rising channel.

Big Picture Bullish

Gold has the potential to break out of a more than decade long basing pattern, that starts with the high in 2011, so a pullback or further sideways action can provide a rest before making that leap. In other words, it would be healthy for the uptrend to see gold take more of a rest before triggering a bullish long-term breakout. Once that breakout occurs, we would like to see gold accelerate to the upside. Taking a rest first and so close to the historical high may make it a little easier for gold to keep going following new record highs.

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