Measured Move Suggests Upside Potential for Gold

Gold Forecast Video for 10.03.23 by Bruce Powers

Gold jumps off a significant support zone and triggers a bullish reversal above yesterday’s high. Indications are that the low of a minor correction is complete and gold is now ready to trend higher. Going forward watch for continued signs of strengthening and additional bullish signals. At the same time, a drop below this support zone (identified below) will be bearish.

Gold Found Support at 88.6% Fibonacci Retracement Level

Gold found support yesterday at an 1,809.33 low thereby completing an 88.6% Fibonacci retracement of the most recent five-day uptrend. That low was a previously identified support zone that includes the 200-Day EMA, now at 1,805.64, a 61.8% Fibonacci retracement level at 1,814, plus previously significant swing lows and highs. The bullish reaction off the support zone today bodes well for the bull trend.

Potential Double Bottom Forming

In the bigger picture, a potential bullish double bottom trend reversal pattern may now be setting up. Yesterday’s swing low creates the second bottom and a breakout triggers above this week’s high of 1,858.33. Keep in mind that the pattern is not valid until a breakout occurs and until then it is a possible double bottom. The classic measuring objective or target from the pattern is around 1,911. That target provides plenty of upside if reached and is consistent with the 61.8% Fibonacci retracement of the downtrend at 1,900.51.

Classic Measured Move Targets 1,911

Of current interest is the developing measured move off yesterday’s low. It is the second leg up off the most recent trend low of 1,804.68. The first leg up of the trend started off the low and ended at this week’s high. Gold will hit 1,863 if the target is reached and would also complete a 38.2% Fibonacci retracement at 1,863.90. This is a high probability target zone if gold keeps rising.

Nevertheless, given the significance of the recent support zone, including the double bottom pattern and especially the 200-Day EMA, higher target zones should eventually be reached. As can be seen on the chart, the first higher target zone is from 1,877 to 1,882 and is derived from Fibonacci confluence price levels. Higher still is the double bottom target at 1,911 and the 61.8% Fibonacci retracement at 1,900.51 price area.

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