Momentum Building: Gold Eyes Higher Targets Amidst Pattern Developments

Gold Forecast Video for 21.12.23 by Bruce Powers

Gold stalls out and trades inside day with a relatively narrow trading range. Yet, it remains well positioned to continue its ascent. Support around the 50-Day MA (orange) was successfully tested at the low of the recent correction ended last week. Following an advance off the 50-Day line gold rose back above the shorter period 20-Day MA (red). The 20-Day line was then successfully tested as support over the prior three trading days. This is a sign of strengthening as upward momentum improves and demand is sustained.

Advance Above 2,043 is Bullish

A rally above today’s high of 2,043 is short-term bullish. But gold really needs to get above the trend high at 2,048 before a more reliable continuation signal is generated. Initial higher targets are either shown on the chart with Fibonacci levels or a black horizontal line that marks previous swing high of some significance. For example, both the 2,070 and 2,082 level are from prior swing highs and record highs at the time.

Forming Bullish ABCD Pattern

Following the 1,973-retracement low from last week gold formed a potential rising ABCD pattern where we’re looking for a match between the CD leg of the rally and the rising AB leg. Once the CD leg matches the price change from the AB leg, a pivot level is identified at the completion of the pattern. Either a bearish reversal may follow or gold breaks through the price level to continue higher.

ABCD Pattern Targets 2,091

The first target from the rising ABCD pattern is at 2,091. Upward momentum represented by the rising ABCD pattern might be able to bust through lower potential resistance levels with little hesitation. This is not a prediction, just information to be aware of.

The ABCD pattern, sometimes called the zig zag or lightning bolt pattern, occurs relatively frequently in financial markets. It reflects the tendency towards similarity or mathematical relationships between the size of different price swings within the same instrument. As the ABCD pattern advances it may show a degree of power or strength of demand that can push price through potential resistance barriers.

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