“Gold Forecast Video for February 24, 2021 by Bruce Powers”
Yesterday, gold saw a bullish reversal off the bottom hammer candlestick pattern, leading to a strong rally and testing resistance around the 2,009 interim swing low. Gold reached a high of 2,008 before encountering resistance and pulling back. Given that this is just the first day of the reversal, it is likely that we will see an extension to higher prices, whether it happens tomorrow or after a potential interim rest day. However, if the price drops below today’s low of 1,990, a bullish resolution to the breakout becomes less likely.
The spike in volatility seen since Tuesday’s sharp selloff may have contributed to today’s bullish price action. Thursday’s breakout indicates that buyers are taking control again following Wednesday’s dip to a new trend low of 1,984. A daily close within the top third, or even the top quarter, of the day’s price range will show strength that could carry over into the coming days.
It’s important to note that today’s rally is just the beginning of a daily bullish reversal. As long as gold stays above 1,990, we can expect higher target areas to be hit eventually. The previous high of 2,031 is a key upside pivot, also near resistance represented by the 50-Day MA. There may be some resistance at 2,015, which is confirmed by the 38.2% Fibonacci retracement. Further up, we have the combination of the 50% retracement and the 20-Day MA around 2,024.
Interestingly, the light blue horizontal line at 2,031 on the chart comes from the August 2020 trend high, which was followed by a 21% correction and maintained the record high price for gold for 18 months. A breakout above and subsequent daily close above the 50-Day line, now at 2,031, would signal a bullish move that should lead to a breakout above the upper downtrend line and a completion of the current correction.
In conclusion, if gold can maintain its position above 1,990 and break through the 2,031 level, we could see a continuation of the bullish trend. However, if it fails to hold above 1,990, the chances of a bullish breakout become less likely. Additional insight: The technical analysis suggests that the price of gold is at a critical juncture, with potential for further upside if key resistance levels are broken. Economic events and data releases will also play a significant role in influencing the price movements of gold in the coming days. It is important for traders and investors to closely monitor these factors along with the technical signals.
