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Gold Price Forecast: Holds 50-Day MA Support Amid Downtrend Concerns

Gold holds support around the 50-Day MA for the fourth day in a row on Tuesday. It remains sandwiched between resistance around the purple 20-Day MA and the 50-Day line for support. Although gold has dipped below the 50-Day line intraday in the last two days, it has ended the sessions at or above the 50-Day line. Watch where it ends today to see if there is a change in the recent closing pattern. If the daily close is lower relative to the 50-Day line than what has been seen to date, it may be signaling further weakness before the retracement is complete.

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Weekly Chart is Bearish
Nevertheless, the weekly chart is taking a more bearish tone. This week triggered a third consecutive lower weekly low. The week’s low of 2,315 is lower than last week’s low of 2,321, which is lower than the prior week’s low of 2,325. In addition, this week and last week’s highs are each lower than the prior week. In other words, there is a series of lower weekly highs and lower weekly lows established on the weekly chart, which defines a downtrend. That will start to change if this week’s high gets above last week’s high of 2,364 before the end of this week.

Price Support Areas to Watch
This week’s low of 2,315 is key near-term support. A decisive drop below that level has gold heading towards potential support around a top trend channel line at approximately 2,299 and then the 50% retracement zone at 2,289. Note that the recent swing low found support in early-May at 2,277. If that price level is eventually broken, then the 2,239-price zone becomes the net lower target (D). That target reflects price symmetry within a falling ABCD pattern, as marked on the chart. Further down is the second target for the ABCD pattern at 2,205. It is part of a price support zone from 2,208 to around 2,154.

Signs of Strength Above 2,364
Gold will be showing signs of strength rather than weakness with a rally above the most recent swing high (C) of 2,364, which is also last week’s high. Until then, downside risk remains. A daily close above 2,364 will further confirm strength and more so on a rally and close above the 2,384 daily high from May 23.

Source: Fxempire