Maintains Strength from Thursday’s Rally
Since reaching a low of 2,364 earlier in the week, gold has only experienced one strong up day which occurred on Thursday. Today’s trading session has shown a narrowing range, indicating a potential slowdown in momentum. However, despite this, gold is on track to end the week at its second highest weekly closing price on record, highlighting its underlying strength.
Furthermore, the weekly chart is set to close with a bullish hammer candlestick pattern, which is a positive sign, especially when occurring at a swing low outside of a consolidation range. Despite these positive indicators, gold is approaching a significant resistance zone marked by the double tops at 2,478 and 2,484, the record high.
Heading Towards This Week’s High of 2,459
A breakout above today’s high of 2,437 will signal further bullish momentum, with a target at the week’s high of 2,459. It is worth noting that gold has been trading within the range set from Monday since Tuesday, suggesting a period of consolidation as last week’s support and resistance levels contain this week’s price action.
Since forming a symmetrical triangle pattern from the low of 2,364 on Monday, gold appears positioned for an upside breakout. However, this may result in a prolonged period of consolidation as the triangle pattern plays out.
50-Day Line Key Support
The 50-Day Moving Average has converged with the lower line of the symmetrical triangle pattern, providing key support at the current level of 2,371. As symmetrical triangles can break out in either direction, there is a possibility of a downside move. In such a scenario, the first lower target would be at 2,347, completing a falling ABCD pattern.
By keeping an eye on the 50-Day MA and the pattern formations, traders can gain insight into potential price movements and key support levels for gold in the near term.
