Gold Price Forecast: Resistance at Fibonacci Confluence, Bullish Momentum Persists

Gold continues to press up into a resistance zone that has stalled the ascent since Monday. Support for the sharp rally is around the 8-Day MA at 2,322. It remains the most sensitive level to watch for a sign of a change. A decisive drop below the line could lead to a deeper retracement. Today’s low of 2,326 and yesterday’s low of 2,319 are other nearby price levels to watch.

Fibonacci Confluence Zone Marks Resistance

There are four Fibonacci levels that create the current resistance zone. They mark a potentially formidable supply area that may lead to a turn down in price prior or a move to new trend highs. A drop below today’s low provides the first sign of weakening. Weakness will then be further indicated on moves below 2,322 and 2,319. A daily close below 2,319 will confirm a pullback. Nevertheless, given the strong rally a pullback may not last long. It will leave clues as to remaining bullish demand.

Decisive Breakout Above 2,365 Triggers Bullish Continuation

Moreover, the Fibonacci confluence resistance zone marks a key pivot that gold may break through before a pullback. A decisive breakout above this week’s trend high at 2,365 will be bullish and could lead to the price of gold continuing to advance to the next higher target zones. It would mark a breakout from a key pivot zone.

At the time of this writing gold remains strong and is trading near the highs of the day and above yesterday’s high of 2,360. If it stays strong into the close the day may end at a new record high daily closing price. Also, notice that much of the trading for the past several days recognized support above the two trendlines that cross around 2,323. Each is a top line of a rising parallel trend channel.

New High Targets Start at 2,386

The first new high target completes a rising ABCD pattern with the CD leg extended by 127.2% of the AB leg. It is at 2,386. That target is followed by several higher Fibonacci targets that cover a range from around 2,404 to 2,422. Unless there is a sharp drop on Friday, gold is set to close strong for the week and near the highs. If it occurs, it suggests that buyers remain in charge, and they may stay in charge heading into next week.

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