Gold Price Forecast: Surges to 2,451, Eyes New Record Highs

Gold continued to strengthen on Wednesday as it reached a high of 2,451, thereby triggering a breakout above the most recent interim swing high of 2,432 (C). This follows a bullish reversal following a successful test of support around the 50-Day MA last week. The 20-Day MA was recaptured yesterday, providing an early warning for a possible continuation higher. Gold is on track to close strong for the day as it continues to trade near the highs of the day. In addition, a daily close above the 2,432-swing high will confirm a bullish reversal of the recent bearish retracement.

Strong Upward Momentum

A wide range green candlestick will likely be completed today following yesterday’s similar bullish candlestick pattern. This puts gold in a position to test the 2,450-price zone as resistance. The price area has been reached and now its reaction at that price zone will provide additional clues. That price level is from a prior trend high from May 20. If exceeded to the upside, and it stays up, gold will be in a good position to test and likely exceed the recent record high of 2,484 reached on July 17.

Bullish Reversal on Monthly Chart

In addition to bullish behavior on the daily time frame, gold also triggered a bullish reversal on the weekly chart. Last week’s high was 2,432. If gold can close above that level today it would further confirm improving strength in demand. Moreover, a close today above 2,445 would generate the third highest daily closing price for gold historically, a further signal of strength.

Initial New High Target at 2,566

An initial new record high target is at the completion of a rising ABCD pattern at 2,480. Higher up is the convergence of two Fibonacci target levels around 2,566. One is derived from a long-term rising ABCD pattern extended by 161.8% that begins from the September 2022 swing low. The second Fibonacci level is from a shorter rising ABCD pattern that begins from the June swing low (A).

It is also extended by the 161.8% golden ratio. The second leg up, the CD leg, is 161.8% of the first leg up, the AB leg of the pattern. As noted previously, the monthly chart confirms the bullish outlook in gold. A monthly bullish breakout triggered earlier in July, and today’s close, the end of the month, will confirm the breakout on a monthly time frame.

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