This bounce created a swing low where the price can now pivot for a retest of the key level support at $1760. If this plays out, it will diminish the weight of the sell-off in the overall chart pattern and suggest this was merely a corrective move in the uptrend which began from the $1,600 per ounce bottom. A move above the key level, now acting as resistance, is needed to revert to the bullish technical outlook. Traders will be watching the strength as it approaches this level for a potential upside breakout.

On the 15-minute candlestick chart, the bounce from the lows is identified as the Flag pattern illustrated here. The pattern is clearly setting up a resistance zone at the upper trend line, with the slight strength going into Friday's close leaving gold well-positioned for a retracement back to the key level. This would materialize as a breakout from the flag, generating an upside forecast in the vicinity of the $1,760 resistance.

If selling pressure resumes in the week ahead, a slide back into the flag with an eventual move to support below $1,710 would be expected as the pattern continues to develop. This would suggest additional weakness and the possibility of an eventual collapse back to the $1,600 level.
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