Gold’s Rapid Recovery Signals Strength for Potential Upward Move

Gold Forecast Video for 16.06.23 by Bruce Powers

Gold undercuts support at the bottom of the downtrend before quickly completing an ABCD pattern and reversing higher back into consolidation. The low for gold had been 1,932 until today when gold fell below that level and then found support at 1,925. A strong bounce followed to well above the prior trend low and near Wednesday’s high. Gold is on track to end the day at a four-day closing high.

Bearish Trigger Leads to Bullish Recovery

Today’s price behavior indicates a potential bullish reversal in the works for gold. If a daily close above yesterday’s high of 1,960 occurs, then there is a real chance for gold to continue to advance. Further signs of strength would be needed. A daily close above the trendline across the top of the pennant (small triangle) would be a sign of strength. We can estimate the line to be around 1,967 or lower. Further strength is then provided on a daily close above this week’s high of 1,971, and then on a daily close above the two-week high of 1,973.

Low of Day Ends Measured Move

The low of today at 1,925 completed a small descending ABCD pattern or measured move. As shown on the chart, the ABCD pattern ended at 1,928. Given today’s response following the breakdown, and rapid recovery up through resistance levels at 1,932 and 1,940, gold could have a fair chance of continuing higher. What comes next will be key to provide clues. Nevertheless, the short side may have been exhausted. The first key higher target is at the 38.2% Fibonacci retracement at 1,989. That price level is confirmed by the 127.2% Fibonacci extension of the last downswing, which also completes there.

Strong Daily Close is Bullish

The bears had their chance earlier in the session but lost control later as the bulls took over. And it looks like the day will end with the bulls in charge. This means the rally in gold could continue into Friday and into next week. If signs of weakness return, however, the sustainability of today’s bullish price action comes under question.

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