Pointing Higher
The next higher target for gold is at $3,079, defined by the confluence of several Fibonacci levels. And it certainly can keep rising given today’s trend continuation signal. Following that price zone there is an early 78.6% target for the CD leg of a rising ABCD pattern at $3,125. Otherwise, watch the area around the rising trend channel line as it may mark a resistance area. After that the next confluence zone is around $3,148 and $3,154.
Top Channel Line May Be Tested
Gold’s behavior around the lower top trend channel line should be telling as it represents the top of a large ascending parallel trend channel from a low in October 2023. The larger the pattern, the more significant the price level may be. There is also a shorter and current trend channel on the chart highlighted in green. The top line from that channel is higher than the larger channel line. Notice that the $3,125 price level could be reached even if resistance was seen at the initial channel line. It will depend on how the angle of ascent for the advance.
Daily Close Above $3,057 Confirms Breakout
Regardless of the above bullish signs, a daily close above $3,057 is needed to confirm the breakout. Gold would need to fall below today’s low of $3,018 before giving a bearish signal. The 20-Day MA marks a key trend support area and will continue to do so if gold continues higher. Despite the possibility that the price is getting more extended, a projection from the closest ABCD pattern (not shown) has an initial target at $3,177.
For a look at all of today’s economic events, check out our economic calendar.
