Gold’s Rising Consolidation Phase Stalls, But Quickly Finds Support Following Pullback

Gold Forecast Video for 08.05.23 by Bruce Powers

Gold reached its target for the completion of an AB=CD pattern yesterday and has since moved into a retracement. So far, the pullback tested support of the 21-Day EMA line today, with a low for the day at 1,999. Price was rejected from the line to the upside for an intraday bounce. The dip also completed a 78.6% Fibonacci retracement of the near-term upswing. This could be the end of the correction. Nevertheless, lower key support is around the uptrend line, estimated at 1,994 currently, and the 34-Day EMA at 1,985.

Short Rising Trend Lines Cross Up Around 2,109

Going forward, keep an eye on the two short rising trend lines that cross up around 2,109, to see if gold stays within the parameters of the rising wedge type pattern. There is also the ascending parallel trend channel present as well.

Gold May be Completing a Measured Move with Symmetry to its First Rally

As discussed in more detail in the May 3 article, gold looks like it may be in the process of completing a measured move that shows symmetry with the first rally off the November low of 1,617 (1). That rally started with a sharp advance or impulse move, evolved into an upward sloping consolidation pattern, and then saw accelerated momentum into the final piece of the rally. The current rally (2) looks like it may be about to complete the rising consolidation phase.

First Advance Ended with Gold Up by 21.2% in 64 Trading Days

The first advance ended with gold up by 21.2% in 64 trading days, while the current rally has been up as much as 15.4% as of this week’s high of 2,082. To match the first advance in percentage terms gold would need to hit 2,193. That certainly seems possible once the next move up begins. Since gold’s new high breakout day ended bearish, with a shooting star candlestick pattern showing price closing in the lower section of the day’s range. Today, there was follow-through to that weakness.

Bearish Weekly Candlestick Pattern Suggests Caution

Further, the week is on track to end with a bearish weekly candlestick pattern as it too is about to close in the lower portion of the range thereby creating a bearish weekly shooting star. This is a sign of short-term weakness, that may continue to play out as we move into the new week.

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