Gold Price Forecast: Hits New High, Eyes Breakout Above $3,175

Gold continued to strengthen on Thursday, reaching a slightly new record high of $3,175. The prior high was $3,168 and the highest daily closing price for gold was $3,131. This means that today’s closing price will likely be the highest ever, further confirming the strength of the trend. Trading continues near the highs of the day at the time of this writing and gold looks likely to end the day in a bullish position, in the top third of the day’s trading range.

Two Strong Up Days

Today is the second sequential strong up day for gold as represented with the wide range green candles. Might a similar third day of gains be possible or will potential resistance lead to a pullback before gold attempts to go higher? Since three strong moves following a bearish pullback would provide a three white soldiers candlestick pattern, the possibility of a third strong up day needs to be considered. But, of course, a decisive breakout above today’s high would need to occur to signal that possibility. Otherwise, today’s high, which reached a potential significant resistance area, may lead to a pullback into Thursday’s trading range.

Higher Target Starting at $3,199

The next higher target above the prior record high was $3,170 and it slightly exceeded today. That price target is noted given how close it is to the top rising trend channel (blue) covering the advance from the December lows. A more significant potential target is up around $3,199 to $3,205. Since the market seems to be recognizing that top channel line, it can be watched along with the higher target zone. Following the $3,205 target are higher targets of $3,232 and 3,250.

Second Chanel Breakout Attempt

In addition to signs of strength noted above, today’s advance triggered a second breakout attempt from a larger long-term rising parallel trend channel (purple). The first breakout last week failed but this second attempt may have greater success. If the breakout is sustained, then bullish continuation within the smaller trend channel parameters becomes more likely.

Potential Support on Pullback

Therefore, the top purple channel line is potential support and is currently around $3,126 but since the line is rising the price will change. There are also prior weekly highs at $3,087 and $3,058 where support could be seen. Since this week established a wide trading range, a bearish pullback could result in volatility being higher than normal pullbacks.

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