Gold Price Forecast: Tests Trendline Resistance Amidst Bearish Channel Pressures

Short-term Strength in Counter-trend Rally

Nonetheless, the trendline coincides closely with the 20-Day MA that was indicated as resistance at the recent minor swing high of 2,639 from last Thursday. It is now at 2,639, which is a sign of strength that would suggest strength, as a rise above that high as gold would have also reclaimed the 20-Day line by then. However, this would be a counter trend rally within a down trending channel. The channel represents downward pressure on the price of gold. A rally above the minor swing high puts gold in a position to test potential resistance around the 50-Day MA at 2,661, followed by the line at the top of the channel.

Weekly Chart Points

Price levels on the weekly chart (not shown) are also worth considering. Last week gold closed below its 20-Week MA for the first time since early-October 2023. And it may do so again this week. But the potential bearish implications of a weakening weekly closing price will change if gold can get above and stay above the 2,639-swing high as it is also a weekly high. So, a breakout above it will trigger a bullish reversal on the weekly time frame. Might that indicate improving demand that could sustain a breakout through the top trendline and then possibly follow with a rise above the December 12 swing high at 2,726?

Bearish Below 2,596

Given the current near-term patterns, a drop below Monday’s low of 2,596 is bearish and could lead to a continuation of the falling trend with a drop below the minor 2.58 swing low. The possibility of an eventual test of support around the 200-Day MA, now at 2,486, would then increase.

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