Gold Price Forecast: Pulls Back from Record High, New Targets in Sight

Gold pulled back on Tuesday from Monday’s new record high of 2,590. Monday ended with a narrow range day that triggered to the downside today on a drop below 2,575. The low for the day is 2,561 at the time of this writing and gold should complete the day with a lower daily high and lower daily low. This opens the door to a deeper pullback before the bulls take back control.

Breakout Level at 2,532 May be Tested as Support

Last Thursday gold broke out to a new record high and out of a three-week tight consolidation pattern. It ended strong for the week, near the highs of the week’s range. Therefore, weakness from here should see signs of support at or above the breakout level of 2,532. It clearly defined resistance for several weeks and should now reflect an area of support. A little lower is potential support around the 20-Day MA, now at 2,520.

The 20-Day line did a good job recently of marking trend support around the bottom of recent daily ranges. Moreover, an internal uptrend line marks a similar price area as they are tracking each other. This means that if gold drops below the 20-Day MA and stays there, lower prices may be tested. Until then, the expectation is for short-term weakness to find support that leads to new trend highs.

Next Potential Resistance Zone Nearby Starting From 2,595

There are two higher target zones highlighted on the chart. The first is close and ranges from around 2,595 to 2,605. The range includes a potentially significant pivot at the initial measuring objective for the recently symmetrical triangle (purple) consolidation pattern at 2,605. Gold broke out of the triangle on August 16. The lower level of the range is the 127.2% extension of a rising ABCD pattern (purple).

Higher Target Zone Starts at 2,650

Further up is a Fibonacci confluence zone from 2,650 to 2,661. It includes the target from another rising ABCD pattern (orange) at 2,660. The beginning of the range is defined by a long-term 227.2% extended retracement of the decline that began from the March 2022 swing high of 2,070. There are several higher targets but one that stands out is around 2,803. That pivot would complete a measured move that covered the upswing from the February swing low.

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