Gold’s Bullish Reversal Signals Strength Amidst Weekly Breakout Potential

Gold Forecast Video for 18.09.23 by Bruce Powers

Gold triggers a bullish reversal out of a bottom hammer candlestick pattern on a rally above yesterday’s high of 1,913. Today’s advance put gold back above the 34-Day EMA, a sign of strength. It will be a stronger bullish indication if it can also end Friday above the 34-Day line, currently at 1,924. Gold reached a four-day high at today’s high of 1,930 and it is on track to close at the highest daily close in eight days. The weekly chart, as discussed below, will also be bullish once completed today.

Breakout and Strong Upside Momentum Needs Further Confirmation of Strength

Today’s bullish reversal and subsequent price action, showing strong intraday momentum, points to the completion of the correction. Further confirmation will be watched for. As long as gold can end today in the top third or so of the day’s range, it has a good chance to keep going. The key price level to be exceeded at this point is the seven-day high at 1,931. That’s a minor swing high and a weekly high. A daily close above that price level will confirm strength and that will increase the chance for a bullish continuation.

Weekly Bullish Setup as Well

There is a potential bullish setup occurring in gold on the weekly chart as well. Gold is set to end the week with a bullish hammer candlestick pattern. A bullish weekly breakout occurs on a rally above this week’s high of 1,931 (minor swing high on daily), with strength confirmed on a daily close above that price level. The weekly setup for the three weeks is a bullish revstrat. This is where there is an inside week that triggers to the downside (this week) before closing back within the inside week’s range, but below the high of the range.

ABCD Pattern Target Projected to 1,969

Now that there are signs that the recent swing low may be complete, an ABCD pattern can be projected to assist in identifying a target. The initial upside targets include a range from the September 1 swing high at 1,953 and down to around 1,946, with the lower price area coming from the 61.8% Fibonacci retracement and previous weekly highs. The target for the standard AB equals CD pattern is 1,969. That’s where the price change in the CD leg will match the change in the AB leg, reflecting similarity between the two swings.

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