Gold Price Forecast: Record High but Struggles to Confirm Strength

Gold triggered a bullish breakout of a pennant pattern on Wednesday and proceeded to rise above the prior high of $2,943 to reach a new record high of $2,947. However, given a likely weak closing price today there is the possibility of a failed breakout. At a minimum, today’s closing price would need to be above yesterday’s high of $2,937 to confirm strength, and better yet above last Friday’s high of $2,940.

Instead, gold is at risk of closing below Tuesday’s high as it is trading below that price level at the time of this writing. It looks like gold will end the day with a relatively narrow range that does not reflect a strong bullish breakout. That could change but for now the day’s price range provides key near-term price levels.

Pennant Breakout at Risk

The bull pennant has not failed yet, it is just getting off to a slow start and that is a concern. Nonetheless, what happens next will be important. A decisive rally above today’s high could lead to a test of the next target area around $2,961. Further up is a target derived from a long-term price pattern that began in 2022 and points to $2,982. Subsequently, a price zone from $3,012 to $3.043 marks the confluence of four targets. Since they are relatively close together, it may be most useful considering it as a range of potential resistance.

Top Channel Line Provides a Guide

Another guide is provided by a trendline across the top of a bullish trend channel. The potential resistance zone starting at $3,012 is in the price area around the top trendline. Also, notice that when considering that line along with the near-term uptrend line a rising bearish wedge type pattern is indicated.

Gold could rise towards a test of resistance near the top line and still hit the higher resistance zone before breaking above the line. As a matter of fact, the $3,012 price line is crossing the trendline today. An interesting coincidence or is the market telling us to watch that line? Let’s see.

Below $2,919 is Short-term Bearish

Given support at today’s low of $2,919, a decisive drop through that low opens the possibility of gold testing support around the lower end of the pennant consolidation pattern. Tuesday’s low of $2,892 provides a proxy for the line as of today. However, last Friday’s low at $2,877 is a minor interim swing low and therefore has greater significance as it is part of the bullish price structure.

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