Gold Price Forecast: Poised for Bullish Continuation Above $2,532

Gold triggered a bullish reversal on Thursday as it rallied above Wednesday’s high to reach a four-day high of 2,523. This follows a successful test of support around the top of a symmetrical triangle consolidation pattern the prior two days. Nonetheless, gold remains stuck within a tight consolidation range near the top of its bull trend from 2,471 and up to the record high of 2,532. This is bullish behavior that should resolve itself to the upside if gold doesn’t drop below the top boundary line of the triangle and stay there.

Additional Signs of Strength

Additional signs of short-term strength include the relationship with the 20-Day MA (purple). Notice that gold broke out above the 20-Day line on August 8. Each subsequent daily close has been above the 20-Day line. Support was seen today at the 20-Day line after falling below it the past two days.

The behavior of gold around the 20-Day line, along with the bull breakout of the triangle, the accompanying long-term bull trend breakout to new record highs, followed by a minor pullback that holds above key support, are all bullish technical signs. They point to an eventual continuation of the bull trend.

Higher Targets Begin with 2,566

An upside breakout and trend continuation signal will be generated on a rally above 2,532. That will put gold in a position to target higher prices. The initial primary target is derived from the symmetrical triangle pattern. It provides an initial target price of around 2,605. That price level is given added credence by the extended target from a rising ABCD pattern at 2,995.

There is also a lower target at 2,566, which is the 161.8% extension of a long-term ascending ABCD pattern that began from the September 2022 swing low of 1,675. If gold can eventually rally above the triangle target pivot of 2,605 it will have a chance to reach the next higher target zone 2,654 to 2,661. Fibonacci analysis was used to define that price zone.

Long-term Target Up at 2,797

A long-term target for gold is up around 2,797 as that is that 200% extension of the retracement from the drop following the 2011 peak at 1,921. The 161.8% target at 2,463 was already surpassed. As uncertainty about the economy and the potential for a recession increase, investors are likely to turn their attention to precious metals as gold is primed technically for an ascent.

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