Bullish evidence building
Given the characteristics of the advance from the recent higher swing low of 2,605 (C) and including the daily close above yesterday’s lower rising channel line, gold is in a position to break decisively above the November swing high and possibly the challenging recent record high of 2,605 (C). 2,790.
Additionally, a weekly bullish signal was issued this week, which will confirm this week with a close above last week’s high at 2,657. While today’s advance produced a higher swing high, it should be confirmed with a daily close above the high. So far, it doesn’t look like this will happen by the end of today.
Key term support at 50 days MA
Support around the 50-day MA is an important near-term indicator to watch. If support is still found at or above the 50-day line, the near-term outlook remains bullish. Nevertheless, a sign of strength would be needed with a rise above today’s high at 2,726, indicating bullish continuation. However, if gold falls below the 50-day line and stays there, the price area around the intersection of an ascending and descending trendline at 2,654 can be watched for potential support. Also note the 20-day MA, which is close to the crossing lines at 2,649.
Recovery from a healthy correction of 9.1%
Finally, the recent correction to a low of 2,537 saw the gold price drop by as much as 253 points or 9.1%. That is the biggest correction since a 13% decline occurred after the May 2023 peak. Therefore, combined with recent bullish technical evidence showing improving demand and a strengthening trend, gold shows that it is likely to move higher. How it will go about getting there, and how long it will take, is a question.
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