Targets and Resistance Levels to Watch

Gold Forecast Video for 10.07.23 by Bruce Powers

Gold rises above Thursday’s 1,928 high before finding resistance at 1,935. That high is still below the 34-Day EMA trend indicator, now at 1,939. Nevertheless, as of today we have a higher swing low for gold, the partial definition of an uptrend, and we will have a higher swing high on a rise above Wednesday’s swing high around 1,935.

Higher Swing Low Partially Bullish

Since yesterday is a higher swing low, we can use it to identify a rising ABCD pattern where we’re looking for the CD leg of the advance to match the price appreciation in the AB leg. The standard completion target of the pattern occurs when the two legs of the trend match. That target price is where resistance might be seen followed by a turn down. In addition, we can extend the target to two higher price levels by projecting the CD leg by 127.2% of the AB leg and by 161.8% of the AB leg. These are Fibonacci ratios. When we do that, alternative targets of 1,956 and 1,971 or identified.

Weekly Breakout on Deck

Earlier in the week gold rose above last week’s high of 1,933, but it was unable to close above it. If we see a close today above that level, it will provide a new confirmation of strength. We already have a higher weekly high and higher weekly low. That by itself is a sign of strengthening. It is the first time in nine weeks, since the correction began, that a prior weekly high has been exceeded. Now, we need to watch for additional signs of strength and upside follow-through.

Watching for New Signs of Strength

Following a daily close above last week’s high, gold needs to show strength by closing above the 34-Day line first, then the three-week high of 1,959. Once a daily close above last week’s high occurs a weekly bullish reversal is signaled. Gold should continue to progress higher from there.

It is interesting to see the current developing bottom relative to the last test of support at the 200-Day EMA earlier this year. The current pattern is close to identical. An initial touch of the line, followed by a bounce, then another drop to test the line, however support steps in before it is reached in the second bottom.

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