Gold Price Forecast: Eyes Breakout as It Retains Key Support Levels

Gold continues to show strength as it retains key near-term support levels on Thursday and attempts to rally above yesterday’s high of 2,528.93. At the time of this writing, gold is traded inside Wednesday’s price range with a high of 2,528.66 and a low of 2,504. You can see on the chart how the low today bounced off support represented by the trendline drawn across the top of the recent consolidation phase, starting from the April swing high. Gold has closed above that line for eight of the last 10 days.

Holds Above Support

Key near-term support is represented by the top line of a symmetrical tringle pattern (purple). As of today, the 20-Day MA at 2,471 has converged with the top line, pointing to the same support level. The 20-Day line is trending up and will represent higher prices going forward. As it does so, it will replace the top triangle line as key near-term support.

Awaiting Further Upside Following Breakout of Symmetrical Triangle

Following a bullish breakout of the triangle nine days ago, gold has been consolidating. It quickly hit a new record high of 2,532 a couple days after the breakout and then pulled back to find support at the top line of the triangle. Since then, it has not gone far. Of course, a bull trend continuation signal will be indicated on a breakout above 2,532. If another pullback to again test support around the top of the triangle occurs first, it would not be surprising given the obvious bull trend. Sometimes an obvious price pattern fails to follow through as anticipated.

Triangle Indicates 2,605 Potential Target

An upside breakout will have gold heading towards several potential targets where resistance may be seen. Basic analysis of the symmetrical triangle pattern indicates a minimum possible target of 2,605. However, there are lower interim targets as well that could be significant. The primary price level below the triangle target is 2,566.

It is derived from a long-term pattern that completes a rising ABCD pattern extended by the 161.8% ratio. In other words, the CD leg of the advance is 161.8% of the first AB leg up. The first leg up begins from the September 2022 swing low and the second starts from the October 2023 swing low. A harmonic relationship between the two upswings of the pattern occurs at the target.

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