Signs of Strength Remain
After experiencing a bull breakout, gold retraced and successfully tested support around the top trendline of the triangle pattern, hitting a low of 2,494 last Thursday. Notably, yesterday’s session marked a new record daily closing high for gold, indicating a show of strength in the market. The converging of the rising purple 20-Day MA with the top triangle line further enhances the potential significance of the support level. As long as gold remains above the top triangle line and the 20-Day MA, the bullish sentiment is upheld, with expectations of reaching new record highs in the future.
Price Range Evident in Weekly Chart
Looking at the weekly chart, we can observe the same price range as identified in the daily chart, with last week’s high at 2,532 and low at 2,471. This week, although ongoing, has shown an inside week pattern, indicating a tight consolidation phase.
Daily and Higher Time Frames are Bullish
With an uptrend forming in both short-term and long-term time frames, spanning over the past five weeks, gold is anticipated to push towards new record highs. A clear break above 2,532 will signal a continuation of the uptrend and the breakout of the symmetrical triangle pattern. Initial upside targets include 2,543, 2,566, and a range between 2,595 to 2,605, with the higher level being the target calculated from the symmetrical triangle pattern.
Despite the current consolidation phase, there remains a possibility for gold to dip below the 20-Day MA and top triangle line to test lower support levels. A potential test of the lower boundary of the triangle could occur, with the 50-Day MA at 2,414 serving as a notable support level within the range.
For an overview of today’s economic events, refer to our economic calendar.
Additional Insight:
To add more context, it is important to note that the technical analysis presented in the article focuses on the price movements and trends in the gold market. Factors such as inflation rates, central bank policies, geopolitical events, and the overall economic environment can also influence the price of gold. Investors should consider a diverse range of factors when making decisions regarding gold investments.
