Gold price forecast
- Gold prices have shown an average reversal in recent weeks.
- While support from the 1796-1800 area has carried out a few different tests, the resistance side of that range is currently seeing pressure as price action threatens a bullish breakout.
- This morning saw the impression of yet another new eight-year high, but buyers have so far been unable to drive the trend with a series of higher highs and lows.
Gold prices set new high in eight years
Gold prices started the week with a bang, reaching a new eight-year high in an area that has seen multiple inflections of resistance in recent weeks. Last week I saw a support test in a family area, ranging from the high of 1796 before to the psychological level of 1800; and collectively these support and resistance zones help demarcate a short-term range that is incorporated after that bullish advance in gold prices.
Hourly chart of gold price
Table prepared by James Stanley; Gold at Tradingview
The golden bulls remain in charge for now
Taking a step back and watching gold prices since the March low, there have been two major bullish trends. The first took place from the lows in March to the highs in mid-April; after which gold prices were integrated into a range that lasted much of the next two months. The next uptrend appeared when prices broke out of that range from April to June and recorded an upward trend in early July, ultimately setting that new eight-year high above the 1800 level.
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The big question now is whether we are seeing a third form of uptrend from the March lows; or if buyers are reprimanded when price action tests a new high.
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Gold price chart in eight hours
Table prepared by James Stanley; Gold at Tradingview
— Written by James Stanley, Strategist for DailyFX.com
Contact and follow James On twitter: @JStanleyFX
