Navigating Gold’s Path: Key Support Tests and Future Rally Prospects

Gold Forecast Video for 09.01.24 by Bruce Powers

Gold further retraced its prior advance today, dropping to a new retracement low, and falling below the uptrend line before finding intraday support. Support was seen at 2,017, right around a weekly low and the 61.8% Fibonacci retracement. An intraday bounce followed with gold on track to close above the prior retracement low of 2,024. However, it is also set to close weak relative to the uptrend line as it remains below the line at the time of this writing.

Support at 50-Day MA is Key

Either today’s decline tested support of the 50-Day MA (orange) or another drop is due to catch it more clearly. The 50-Day line is now at 2,011 (C). There have been two successful tests of the 50-Day line as support since gold rose above it on October 13 with a sharp rally. It is anticipated to show support again for the current approach as it has been identified by the market as a key trend indicator previously. Note that the shorter 20-Day MA has not been confirmed recently as it has not identified support for the three most recent approaches. For the bullish outlook to hold, gold needs to stay above the 50-Day MA.

Pullback Sets Stage for Next Rally

The current pullback should be setting the stage for at least another advance into new trend highs. There have been two rallies off the October 6 low to date, with a third in process. A measured move target for the current advance is around 2,176. At that price the rally would approximately match the two previous measured moves (purple arrows) at a minimum. Symmetry is reflected in the earlier advances with an approximate match in both time and price. That sets the stage for the current rally as symmetry between swing shows an organized structure within price history.

Watching For Bullish Signal Above Today’s High

Once the bottom is confirmed gold is anticipated to progress towards prior highs. As of today, a rally above today’s high of 2,047 would indicate strength. The ABCD pattern on the chart has been redrawn to include today’s low as point C. Once gold rallies above today’s high it should then head towards the recent trend high of 2,088 (B), followed by the 78.6% Fibonacci retracement at 2,100. Once 2,100 is cleared, the stage is set for new record highs.

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