Gold’s Rally Continues: Aiming for New Historical Highs Eventually

Gold Forecast Video for 17.07.23 by Bruce Powers

Gold takes another rest day near trend highs with an outside day. Friday’s session started with a minor move above yesterday’s high before sellers took over to push gold to below yesterday’s low where it looked like a retracement was starting. Subsequently, buyers stepped up, pushing prices higher.

Bullish Doji Hammer Continuation Pattern

At the time of this writing gold is on track to close as a bullish doji hammer candlestick pattern. It is considered bullish as the bears had control earlier in the session, but they lost it to the bulls by the end of the session. The bulls won and that demand can continue. Next, watch for an advance above today’s high of 1,964 for a sign of strength, then a daily close above it to confirm strength.

Higher Targets in Range

So far, the rally has not yet reached the 38.2% Fibonacci retracement at 1,965. But a more significant target is the extension of the rising ABCD pattern. That pattern completes at a 161.8% Fibonacci extension of the CD leg at 1,971. Since the two target levels are relatively close together, they can be looked at a range of potential resistance from around 1,965 to 1,971.

Established a Solid Foundation at Recent Low

Gold has been rising off a solid foundation of support at the recent retracement low of 1,893.

Support was seen at the 200-Day EMA, which was tested twice, and price was rejected to the upside each time. The subsequent advance has shown strength on the way up, having easily busted through several targets and potential resistance levels. Lower volatility near the high of the rally is bullish so far as there is little of a pullback. Rather daily closes near the high are indicating sustained underlying strength. This points to the possibility of gold continuing higher with little retracement or consolidation first.

New Historical Highs Possible

An eventual test of recent highs in gold and the possibility of an advance to new historical highs is a real possibility. Therefore, on the way up initially, weakness should be watched with the expectation of a bullish continuation. The initial upthrust off the prior two retracement lows was sharp and decisive. So far, the same is true now. You can see how in each of the two advances there was only a small pullback once gold got going. Similar price behavior can happen with the current advance as well.

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