Gold’s Green Day: A Closer Look at Resistance Levels and Trend Reversals

Gold Forecast Video for 07.08.23 by Bruce Powers

We see a little change in character today in the gold market. At first it falls to a new trend low of 1,925 before an intraday bullish reversal takes gold up to above yesterday’s high of 1,939 thereby generating an outside day. The day is green with a high of 1,947. At the time of this writing gold is set to end the week above yesterday’s high and at resistance of the 100-Day EMA (purple).

Gold Sitting at Resistance of 100-Day EMA

Earlier in the day gold broke above the 100-Day line, but it does not look like it can close above it. If it does, that will provide an additional bullish sign along with the day’s close above yesterday’s high. In addition, today’s rally took gold back above the two uptrend lines. Like the relationship with the 100-Day line, gold is set to close pushing up against resistance of the trend lines rather than above it, which would be a stronger sign.

Rise Above Internal Trendline Shows Strengthening

If gold rises on Monday, it will likely break the internal downtrend line marking dynamic resistance of the retracement at approximately 1,948. That would be a minor bullish sign requiring additional follow-through to confirm strength. The internal downtrend is inside the higher trendline and starts from the July 27 high.

So, based on the trendlines a bullish reversal is not indicated until there is a daily close above the higher trendline. That line defines dynamic resistance of the complete decline starting from the May 4 peak. However, although they do provide supporting technical evidence, trendlines by themselves usually do not give reliable signals.

Price Range from 1,943 to 1,941 is Nearby Resistance and Bullish on a Breakout

Notice that the two nearby lines, one rising and one falling, cross in two days. The price level where they cross is approximately 1,943, while the 34-Day EMA is currently at 1,941. Together they identify a potential resistance range from 1,941 to 1,943. Nevertheless, a rally above the range is bullish and confirmed by a daily close above it. Subsequently, an advance above today’s high of 1,947 gives another bullish signal. That price level is followed by the three-day high of 1,955.