Gold Price Forecast: Surges Above Key Levels, Eyes Further Gains

Gold triggered a weekly bullish reversal on Wednesday with a rally to a high of 2,365 before encountering resistance. It is on track to close above last week’s high of 2,340 thereby confirming strength of the breakout. Today’s high tested resistance around the three-week high of 2,369 and gold looks poised to breakout above it. During today’s ascent gold showed its strength by breaking out above two trendlines and the 50-Day MA at 2,338. Notice how the lines had converged before the breakout followed.

Additional Signs of Strength

A rise above the most recent swing high of 2,369, also a weekly high, will further confirm strength of the breakout and will increase the chance for a continuation higher. The next higher target will then be around the 61.8% Fibonacci retracement at 2,388. That level is confirmed by the June 7 swing high, which marks the same price area. Given how it shapes the downtrend price structure, a breakout above 2,388 will be more significant than a rise above the three-week high. Moreover, the June 7 high is also the five-week high.

Second Breakout of Rising Trend Channel

As noted above, today’s rally busted through resistance from two trendlines. The more notable is the top line of a rising parallel trend channel connecting the May 4 swing high. Why? In early-April gold triggered a bullish breakout of that rising channel that was followed by a rally to new record highs. The line retained support for approximately eight weeks thereafter. Subsequently, the bull breakout began to show signs of failure on the decisive drop on June 7. Today’s advance begins a second bull breakout attempt that could lead to greater success for the price of gold.

Simple Extension Measurement Targets 2,494

A simple extended retracement measurement of the most recent decline points to a near-term target for gold around 2,494. However, there are also two lower Fibonacci targets derived from longer-term measurements. The more significant is the 161.8% extended retracement of the decline that began from the March 2022 swing high of 2,070. It shows up at 2,462. There is also a large, measured move pattern that completes at 2.480. The initial measured move originates from the August 2018 swing low of 1,160.

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