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Jul 28 - 12:55 PM

BofA: Technical Outlook on Gold

By eFXdata  —  Jul 28 - 12:00 PM

Bank of America (BofA) provides its technical analysis on the price movement of gold based on the observed price patterns and potential scenarios.

Key Takeaways:

  1. Current Gold Price Movement: Gold prices have been oscillating within a confined range between $1945 and $1987.

  2. Head and Shoulders Base Formation: The price action of gold in the period from May to July is increasingly resembling a 'head and shoulders' base pattern. This pattern is typically a bullish reversal pattern that indicates a potential shift from a downtrend to an uptrend.

  3. Significance of $1987 Level: If gold can rally and break above the $1987 level in the next five trading sessions, it would reinforce the belief in the 'head and shoulders' base formation, potentially indicating a move upwards to the $2070 level.

  4. Potential Downside Risk: Should gold prices drop below the $1945 level, BofA sees a risk that prices might descend to retest their lows or the 200-day Simple Moving Average (SMA), which hovers around the $1900 mark.

In Summary:

BofA is closely observing gold's price movements, particularly its behavior around the pivotal $1987 mark. A move above this level could be a bullish signal, indicating a potential rise towards $2070. Conversely, a dip below $1945 could see prices approaching the $1900 region again. As always, in technical analysis, the identified patterns provide possible scenarios, and investors should use them in conjunction with other research and risk management strategies.

BofA Global Research


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