Gold Price Forecast: Extends Gains, Eyes $3,125 Amid Strong Bullish Momentum

Gold continued its advance on Friday, reaching a new record high of $3,087. Therefore, a target zone around $3,080, derived by the confluence of several Fibonacci price levels, was exceeded, but only slightly. A daily close today above that price level will be slightly more bullish than a close below it. At the time of this writing gold continues to trade near the highs of the day and looks likely to close in a bullish position, in the upper third of the day’s price range.

Higher Targets in Sight

A decisive rally above today’s high will trigger a continuation of the bullish trend. Gold would then be heading up into potential resistance indicated by a top trend channel line. However, other than the trendline, the next higher target shows around $3,125. It is derived from a rising ABCD pattern that begins from the December interim swing low. A little higher from there is the 261.8% extension of the bearish correction begun from the late-October swing high. That price area is followed by a minor confluence zone around $3,169.

Third Weekly Bull Pattern

This week is the third consecutive week of higher weekly highs and higher lows, that began after two weeks of consolidation and the breakout of an inside week. The high prior to consolidation ended seven consecutive weeks of higher highs and lows. Adding a rising ABCD pattern to the low of December 16 and including the low of the most recent pullback low on March 11, estimates a potential initial target from the pattern at $3,177. Keep in mind that as the bull trend continues to advance there is the potential for an eventual runaway move.

Bullish Monthly Close Likely

Since the month of March has only one more trading day, it looks likely that it will leave gold in a very bullish position on the long-term time frame. Is this a prelude of what is to come or a sign that the price of gold has gone too far, too fast? For now, the expectation is for higher price. Therefore, intraday weakness will likely be used by investors and traders to add to positions or open new positions in the precious metal. However, a sustained drop below today’s low of $3,054 could start to change that.

For a look at all of today’s economic events, check out our economic calendar.