Navigating Gold’s Crossroads: Critical Levels and Potential Trends Unveiled

Gold Forecast Video for 22.01.24 by Bruce Powers

Gold broke out of Thursdays inside day on Friday, and then triggered a breakout of the three-day high at 2,033, before finding resistance at the day’s high of 2,039. Subsequently, it weakened heading towards the end of the session. Gold is currently on track to close relatively weak, below the halfway point of the day’s trading range. That is 2,030 at the time of this writing.

Stuck Between the 20 and 50-Day Moving Averages

Resistance for the day was just below the 20-Day ME, which is at 2,043. That’s puts gold sandwiched between the 20-Day line on the top and the 50-Day MA on the bottom for support. See how today’s low of 2,020 tested support of the 50-Day line and trendline. That is a minor bullish indication but the weak close makes it suspect. Nevertheless, a bounce may have started that could see gold rise to test resistance around the downtrend line. Note that the 20-Day line is on track to converge with the downtrend line, possibly by Tuesday. That would increase the significance of a trendline/moving average breakout if it was to occur.

Uncertainty Dominates with an Upside Bias

Until we see further strength, gold remains at risk of continuing its correction to test lower potential support areas. If today’s low is busted to the downside and prices keep falling a test of the recent swing low as support at 2,002 will be on the agenda. Subsequently, a falling ABCD pattern targets 1,987. The significant 200-Day MA is down at 1,967.

50-Day Moving Average is Key

Until this week, the 50-Day MA was showing support since natural gas rose back above the line with a sharp wide green candle on October 13. It was then successfully tested as support a couple of times, until recently, when gold fell below the 50-Day line. Nevertheless, a relatively swift recovery back above the line, as we’re starting to see today, would go a long way to negating that bearish signal. Gold remains in a move that is the third leg up off the October swing low. If it can stay above the 50-Day line it will continue to have a chance to complete the third advance from that low, which should take it to new highs.

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