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Gold Price Forecast: Consolidates on 50-Day MA Support, Eyes New Highs

Gold is now in its third day of sideways consolidation sitting on support from the 50-Day MA at 2,342. Price support of the range is at today’s low of 2,349. It remains in a constructive position following a bullish breakout from a descending channel last week. Further, a breakout of the 20-Day MA, 50-Day MA, and another trendline also triggered last week. Price action since the breakout has been testing previous resistance as support, which is typically seen in the progression of an uptrend.

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50-Day MA, Key Trend Support
The 50-Day line is a good nearby benchmark to use for signs of strength or weakness. Notice that it has recently converged (close) with the top channel trendline so that they each mark a similar price support zone. Next, the bulls will be watching for an acceleration to the upside away from the 50-Day line. That may set the stage for a challenge to the recent record highs seen in gold.

Last Week Closed Strong
A 61.8% Fibonacci retracement was already completed last week at 2,388. A decisive advance above last week’s high will trigger a bullish continuation of the trend short-term uptrend, which is contained within a larger rising price structure. Last week a weekly bullish reversal triggered, and gold confirmed strength from the breakout with a weekly close at a seven-week high. Further, the week ended strong, with gold closing near the highs for the week.

This week we might see gold continue to consolidate and stay within the confines of last week’s price range (2,318 to 2,393), and end with an inside week. Such price action would retain the bullish outlook for gold and set the stage for renewed enthusiasm from buyers as they seek to see gold rise to new record highs. Following an upside breakout above 2,393 gold would next be heading up towards the 78.6% Fibonacci retracement at 2,415. Next up would come a challenge to the record high of 2,450 that was reached in May.

Monthly Bull Breakout Set to Run
It is also significant to note that last month’s high was 2,388 and it marked resistance for the month of June. June ended with an inside month doji pattern. An attempt at a monthly upside breakout triggered last week during the advance as the high was 2,393. Once that high was hit resistance was seen as sellers took over.

Source: Fxempire