Navigating Gold’s Price Dynamics: Key Levels and Future Possibilities

Gold Forecast Video for 05.01.24 by Bruce Powers

Gold pauses its retracement and trades inside day in a relatively narrow range. Support at the 20-Day MA has stopped the decline so far and it may continue to do so. The low of the day was at 2,036 and it was followed by a bounce. It indicates that the market continues to recognize the 20-Day line. Yesterday, gold completed a 50% retracement of the most recent upswing with a low of 2,031. That price level remains key support for the correction as a drop below it triggers a bearish continuation.

If 20-Day MA Fails, Support Should Be Seen at the 50-Day Line

If a bearish continuation is triggered the maximum drop currently anticipated is down to the 50-Day MA at 2,009. That line was successfully tested as support twice over the past couple of months with price being rejected to the upside each time. The same should happen again if the pullback drops that low. Nevertheless, if it does not reverse a decline, the more significant 200-Day MA is at 1,962. It was successfully tested as support once in mid-November.

Recent Bullish Test of 50-Day MA

The recent relationship of the price of gold to the 50-Day MA reflects improving demand as it continues to gain strength as it advances. Momentum has been strong on the way up with two legs up completing so far. The markets like to do things in three so there is a good chance the current and third advance of the rally off the October swing low will continue. It is possible that yesterday’s low price completes the retracement. We won’t know right away if it does, but a breakout above today’s high of 2,051 is the first sign that it might.

Continuation of Rally Targets 1,246

A rising ABCD pattern has been added to the chart considering yesterday’s low. It provides an initial target of 2,146. However, yesterday’s high of 2,066 will need to be exceeded first for confirmation of strength. To get to that target gold will first need to exceed its most recent record high of 2,135, where it may encounter resistance again. Nonetheless, the initial ABCD target is not too much beyond that high.