Gold Price Forecast: Hits Five-Day High with Resistance at 20-Day MA

Faces Key Near-Term Pivot

Also, a key point to consider is that the significance of the near-term downtrend line may have diminished since the recent swing high on December 12 was established. A new downtrend line connects that high from the peak and with a new parallel line across the bottom of the channel.

The fact that the downtrend line and the 20-Day line identify a similar price area could lead to a spike if the 20-Day line is reclaimed. When two different indicators show a similar price level the breakout through the pivot can sometimes show a higher level of interest and enthusiasm than at other times.

Falling Channel Shows Downward Pressure

The new falling trend channel may lower the potential significance of a breakout above the 20-Day line. Also, the same would be true on a reclaim of the 50-Day MA, a little higher at 2,666. This is because the new top downtrend line represents potential resistance. It adds to the significance of the December swing high (C) as it is a lower swing high and part of the developing downtrend price structure. The current situation is that the potential for a bearish continuation of the falling channel remains until there is a rise above the December swing high.

Reclaim of 2,664 Weekly High Could Improve Sentiment

Another key upside price level to be aware of is last week’s high of 2,664. Notice it is very close to the 50-Day MA. Since last week ended with a lower weekly high and lower weekly (not shown) low a sustained rise above resistance from last week would begin to improve the bullish sentiment in gold as it would negate last week’s bearish signal on the weekly time frame.

For a look at all of today’s economic events, check out our economic calendar.