Gold Price Forecast: Hits New Highs, Eyes Further Gains Amid Strong Demand

Bullish momentum in gold continued as it reached a new record high of $2,845 on Tuesday and demand remains strong heading into the close. Gold looks likely to close near the highs for the day, which is where it continues to trade. A strong close could lead to a bearish continuation in Wednesday’s trading session as it looks like it is heading higher.

Further Signs of Strength

Today’s advance broke through a resistance zone that stopped Monday’s rise thereby putting the next higher price targets on notice. That would be at the $2,556 price zone identified by the 127.2% retracement of the most recent large decline that followed the October peak at $2,790. However, there is also a potential resistance level identified around today’s high. Notice on the chart that a prior support trendline was tested today as resistance.

It has not yet been broken and could continue to be an area of resistance. Since the next higher target is relatively close by, it also wouldn’t be surprising to see a breakout above the line. Moreover, the price of gold could continue higher while still recognizing the line as resistance. Above $2,556 is Having said that trendlines help provide context and clues as to strength or weakness, but they are just that.

Long-term Bull Trend Continues

Gold is in a long-term bull market that continues to show signs of strength and develop in a relatively orderly manner. The current leg of the advance really got going following a breakout of consolidation in late February 2024. Since then, the 100-Day MA (not shown) has done a good job of marking dynamic support for the trend. As of late-January it started to angle up again following a period of angling down. This bullish thesis is what retains demand during retracements. But financial assets don’t rise in a straight line nor in a way that makes it easy to feel comfortable, as advances are followed by retracement and consolidation.

Possible Support During Weakness

Last week gold broke out to a new trend high as it rallied above $2,790. That price area becomes a potential support zone during retracement. If today’s low of $2,807 is busted to the downside, then the pullback may have begun. This week’s low of $2,772 is also a potential support level, along with the 20-Day MA at $2,735.

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