Trend Indicators Show Gold on Track for New Highs

Gold Forecast Video for 17.04.23 by Bruce Powers

Following a daily close at a new trend high, gold pulls back to a three-day low of 1,992. Nevertheless, the uptrend remains intact and gold stays on track towards new highs. Several trend indicators can be watched for signs of support during weakness. If gold stays above the lines, it continues to have a chance to progress higher in the near-term.

The 21-Day EMA and Trend Lines can Provide Support for Gold During Weakness

The primary trend indicator as shown on the chart is the 21-Day exponential moving average (EMA), in orange. As long as gold holds that support going forward, the current uptrend has a chance at continuing before a deeper retracement. Trend lines coming up from the bottom of the pennant (small triangle) formation can also be watched. If price stays above the lines, the chance for an upside continuation remains. A drop below the dash uptrend line shows more weakness than might be seen on a pullback. While a drop below the lower solid uptrend line already has gold below the 21-Day line, which is short-term bearish.

Uptrend Price Structure Can More Easily be Seen in 4-Hour Chart

Today’s retracement found intraday support at the 78.6% retracement of the latest upswing. It can best be seen in this next 4-Hour chart of gold. Here, it is easier to see the recent pattern of higher swing highs and higher swing lows from the second half of March onward. That is an uptrend structure that indicates higher prices for gold as long as the bullish uptrend pattern is retained. In addition to the trend indicators discussed above the structure of the uptrend can tell us something about when momentum and the trend are changing.

Trend Structure Changes on a Drop Below 1,982

A drop below the most recent swing low around 1,982 is part of the uptrend structure. If it is busted to the downside the integrity of the pattern changes as there is no longer a series of higher swing highs. This doesn’t necessarily mean that gold goes down, although it could. Rather, it is a change in character that could be followed by a new pattern of trend or consolidation, if not a deeper correction.

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