Gold’s Price Weakens: Testing Key Support Levels Amid Bearish Signals

Gold Forecast Video for 09.08.23 by Bruce Powers

The price of gold continues to weaken with a new trend low of 1,923, which triggered a weekly bearish signal. It is also set to close below the prior trend low of 1,925. It looks like gold wants to test support of lower prices.

200-Day EMA at 1,923; 6th Test as Support Since December

The next area to watch for support is around the lower uptrend line (approximately 1,921), while the 78.6% Fibonacci retracement is at 1,913. Meanwhile, the significant long-term trend indicator, the 200-Day EMA is at 1,923. This is the sixth test of the 200-Day line as support since gold rose back above the line in December after being below it from May of 2022. Gold has clearly been declining from the 100-Day EMA that was busted four days ago. Over the subsequent two days rallies were attempted but failed. Today is the follow-through day to the downside.

Not only has gold shown weakness by falling below the 100-Day EMA and dropping to a new trend low, but it is also below the long-term trendlines. The remaining lower trendline is an internal line covering a relatively short period of time. It marks a level to watch for support but the 200-Day EMA at this point should be more reliable as an indicator.

Upside Potential: Break Above 1,938, Close Above 100-Day EMA (1,941)

On the upside, if it comes before lower prices, a break above today’s high of 1,938 would be the first sign of strength. After that, a daily close above the 100-Day EMA at 1,941 would be needed. Nevertheless, the three-day high of 1,947 is close to the 100-Day line so it will provide a more reliable price level to gauge strength. That high is also this week’s high and it would put gold back above the trend lines as well.

Gold Within Rising Trend; Support Expected at 200-Day Line, Caution Below it

Despite the persistent pullback, gold remains within a rising trend. Another approach of the 200-Day line should be met with support and increasing demand. Certainly, the bulls do not want to see gold close decisively below the 200-Day line. The uptrend may be at risk of failure if that happens. Of course, price action following a drop below the 200-Day line needs to be watched carefully for signs of bearish continuation or bullish reversal.

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