Gold’s Countertrend Rally Hits New Trend High, but Resistance Kicks in for a Pullback

Gold Forecast Video for 06.07.23 by Bruce Powers

Gold began the session rising to a new trend high to continue the bounce off the recent 1,893 swing low. Today’s high was 1,935 and once reached resistance kicked in to turn the precious metal down to below yesterday’s 1,919 low. So, gold has an outside day and is currently heading towards a close near the lows of the day pointing to the possibility of a deeper pullback. At the time of this writing, a 38.2% Fibonacci retracement has been completed with natural gas continuing to fall towards the 50% retracement at 1,914.

Weekly Bullish Reversal Signals, but Needs Confirmation

Today’s advance also triggered a bullish reversal weekly hammer candlestick pattern as price rallied above last week’s high of 1,933. That breakout has not yet been confirmed though until there is a daily close above that weekly high. Once confirmed it should prove significant as it will be the first time the high of the previous week has been exceeded since the bearish correction began nine weeks ago.

Gold Needs to Get Above 1,942 for Clear Bull Signal

There are several price levels to watch if gold again rises above last week’s high. The first is previous support covering about a month of relatively sideways price action. Support during that phase is designated at 1,937. Therefore, on the way back up resistance could be seen there. Also useful is the 34-Day EMA at 1,942. During the recent consolidation period it marked resistance on multiple days either specifically or generally. This is the market’s way of telling us to pay attention to the 34-Day line. A daily close above the first level at 1,937 is a sign of strength but since the 34-Day line is so close, it should be used as a more significant price level. Once there is a daily close above the 34-Day EMA, gold will also have confirmed strength on a close above last week’s high.

Long-Term Uptrend Remains in Place

The intermediate outlook for gold is that it continues its uptrend that began from the September 28 swing low at 1,615. To date, gold advanced 28.9% off that low at the May trend high of 2,082. If it stays above the 200-Day EMA, now at 1,897, it has a good chance of trending higher again to eventually test and then surpass the prior record high.

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