Gold Prices Weaken Amidst Technical Challenges and Bearish Trend

Gold Forecast Video for 23.08.23 by Bruce Powers

Downward pressure remains in gold as it can barely get a bounce off the trend low of 1,885 and it continues to show weakness. Gold remains below the 200-Day EMA, which it fell below last week. Today’s bounce found resistance just below the 200-Day line at the day’s high of 1,904. Subsequently, prices declined. Natural gas looks like it will end the day within the lower half of the day’s range, not a sign of strength.

Bearish Crossover: 12-Day EMA Below 200-Day EMA

A new concern is the bearish crossover of the 12-Day EMA (red) moving below the 200-Day EMA. That happened today. The combination of the bearish crossover with the weak close following a successful test of the 200-Day line as resistance, are all pointing to continuing selling pressure. Of course, that can change quickly.

Downward Pressure Remains Until Daily Close Above 200-Day EMA

Since gold remains relatively close to the 200-Day line, a rally above it followed by a daily close above it is needed for bullish signs that may be sustainable. The 200-Day line is at 1,907 currently, while the five-day high is also at 1,907. Last week’s high of 1,916 follows. Further, there is a small double bottom reversal pattern at the lows of the retracement, and the relative strength index (RSI) oscillator has pulled back to the same level it was at before the rally off the first quarter swing lows.

Trend Structure Damage: Closed Below Uptrend Line, 200-Day EMA

Some damage to the trend structure has been done during the current correction. Gold has closed below both the lower uptrend line as well as the 200-Day EMA on multiple days. Moreover, it closed below the most recent swing of 1,893 from June. A drop below today’s low of 1,889 is a sign of weakening and points to a likely test of recent support.

Areas of Fibonacci Confluence May Mark Support

Trend low support is at 1,885. If gold falls below that level, then it is likely heading to one of three potential support areas. The first price area is around 1,893, which is followed with more significant price zones from 1,871 to 1,864, and then 1,839 to 1,834. The two lower zones are derived from the confluence of multiple Fibonacci levels.

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