Gold Daily – Have the bulls got what it takes?

Written on 23/08/2021 by Theunis Kruger, FX Trainer at FXTM

The Gold market on the Daily time frame had a short but explosive downward momentum until a lower bottom was reached on the 9^th of August at 1685.15.

After the lower bottom was recorded, bulls flooded the market and price broke through the 15 Simple Moving Average. Although the price only touched the 34 Simple Moving Average and the Momentum Oscillator has yet to pierce through the zero baseline into bullish territory, the market structure does suggest the bulls might have what it takes to start a new uptrend.

A possible critical resistance level was formed when a top was reached on the 17^th of August at 1795.46. The bears then tried to pull the market lower; however, a support level at 1774.41 on the 19^th of August stopped them, and the bulls might be in control again.

If gold manages to break through the critical resistance level at 1795.46, then three possible price targets can be considered from there. The following targets can be calculated by attaching the Fibonacci tool to the top at 1795.46 and dragging it to the bottom of the support level at 1774.41. The first target is estimated at 1808.47 (161.8%). The second price target can be forecast at 1829.52 (261.8%), and the third and final target might be anticipated at 1863.58 (423.6%).

If the support level at 1774.41 is broken, the above scenario is no longer in force.

As long as the bulls continue to dominate and demand overcomes supply, the outlook for gold on the Daily time frame will remain bullish.

For more information, please visit: FXTM               

Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

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Nigel Frith

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