Gold Price Forecast: Targets $2,600 Amid Strong Momentum and Bullish Breakout

Gold continued its ascent on Friday following a bullish breakout on Thursday to new record highs for the precious metal. It is well on its way to reaching the next target zone from around 2,594 to 2,605. Momentum was strong as Friday’s intraday pullback, the low of the day, barely fell into Thursday price range before moving higher. Where the day ends relative to the day’s trading range should provide a clue as to whether the rally can keep going towards the next target without much of a pullback. The upper third of the day’s range starts at 2,576.

Next Target Zone is 2,594 to 2,605

There are two patterns pointing to the 2,594 to 2,605 target zone. The first price level marks the completion of a rising ABCD pattern (purple) that begins from the June swing low and is extended by the 127.2% ratio. Then, the second level of the range is the initial measuring objective for the symmetrical triangle pattern that gold broke out of on August 16.

Decisive Bull Breakout Trigged

Yesterday’s bullish breakout ended a three-week tight consolidation phase above support of the symmetrical triangle. Recently, the purple 20-day MA has been tested and held over multiple days, and specifically yesterday, the breakout day. The breakout was decisive, and the day ended near the highs of the day.

Second Target Zone from 2,594 to 2,605

Although signs of resistance may be seen around 2,594 to 2,605, an eventual breakout through that price zone is likely. If it occurs, the next high price zone to watch for signs of resistance is from 2,650 to 2.661. It includes the completion of a smaller rising ABCD pattern at 2,660 and two Fibonacci extended targets.

There is a 161.8% extended target for the larger ABCD pattern (purple) at 2,661. Moreover, the long-term target level is 2,650. It marks a 227.2% extended retracement of the bearish correction that began from the March 2022 swing high. Of course, there are high possible targets but first let’s see how gold manages the first two.

Support Levels

The area around the recent high at 2,532 is potential support during a pullback. However, today’s low of 2,257 is the first price level to watch. Given that the market has recently recognized the 20-Day line as support, it should also be seen as potential support going forward.

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