Gold’s Resurgence: Strong Rally and Bullish Signals Paint Positive Outlook

Gold Forecast Video for 24.08.23 by Bruce Powers

Gold rallies off a potential bottom and is on track to close strong, near the highs of the day. It remains to be seen whether the bottom will be further tested in a pullback. Yet, today’s price action is constructive as gold has a wide-range green candlestick pattern, has reached an eight-day high of 1,920, and will close back above the 200-Day EMA after closing below it for the prior seven days.

Short-term 12-Day EMA Rebounding, Countering Previous Bearish Signal

Yesterday, it was noted that the short-term 12-Day EMA was starting to fall below the longer 200-Day line. This was a new bearish sign, but it required further confirmation of weakness as the signal was new. If today’s upward momentum can be sustained, then that potential bearish activity has failed as the 12-Day line has turned back up and it should close back above the 200-Day line today. Silver is leading the way in precious metals as it is now on the third day of a strong rally off the bottom. This indicates that gold is lagging but given today’s price action it may try and catch up quickly.

Weekly Chart: Bullish Breakout Above Last Week’s High

In addition to gold moving back above its 200-Day EMA, it also triggered a bullish breakout on the weekly chart as it exceeded last week’s high of 1,916. A daily close above 1,916 will further confirm strength within today’s rally. This week’s weekly candle is an outside week as the range of this week’s price action went below last week’s low and above last week’s high, reflecting a failure of the bearish trend continuation.

Targets: 38.6% Fibonacci at 1,924, 50% at 1,936, July High at 2,019

The first target is close by at 1,924, which is the 38.6% Fibonacci retracement. Once exceeded the next higher target range is around the 50% retracement at 1,936. The July high is 2,01,987. Nevertheless, the larger picture in gold is bullish and its most recent bottom of 1,885 could be the low in gold for some time. This changes of course if there is a drop below 1,885 in the relatively near term. Gold has formed a large bullish cup with a handle pattern over the last 12 years. The last breakout attempt was in the most recent rally that peaked at 2,082.

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