Gold Price Forecast: Tests Resistance – Will Bulls Push to New Highs?

Gold remained within a small developing consolidation range near the highs of the trend on Wednesday. It also established a higher daily low and a slightly higher daily high for the day, reflecting support, and attempted a breakout above Tuesday’s high at 2,765. Tuesday was an inside day. Nonetheless, today’s price range is relatively narrow, between 2,745 and 2,766, and additional market activity would be useful.

Rise Above 2,773 Shows Strength

Another rise above 2,765 that is followed by an advance above today’s would show strength. But a breakout above Monday’s high of 2,773 would indicate greater confidence that the price of gold may be able to continue strengthen. Of course, the recent high of 2,786 would trigger a continuation of the near-term bull trend with the record high at 2,790 a target. If that high is exceeded, there is a higher target around 2,823. There are two indicators marking that price.

First, it completes a 261.8% extended target for a rising ABCD pattern that begins from the October 2023 lows. Further, a more recent ABCD pattern (purple) reaches its 127.2% extended target. After that, the next level indicated as possible resistance is up at 2,856.

Monthly Bull Breakout Set to Confirm

Since the month of January is almost complete, the monthly chart can be considered. A breakout above the December high of 2,726 triggered this month and gold remains above it. Moreover, November’s high of 2,762 also exceeded this month. Therefore, if January ends above that high a bullish breakout on the monthly time frame will be confirmed. That, by itself, provided a strong bullish signal as patterns in the longer-term time frame monthly influence the shorter time frames.

Below 2,731 Could Lead to Test of 20-Day MA

Nevertheless, gold is showing signs of resistance that could yet lead to a pullback. A key level to watch for support in that case would be around the 20-Day MA at 2,702. If that fails, then the 50-Day MA is down at 2,666. Note that a retracement down to the 50-Day line would keep gold above this month’s low of 2,615. The integrity of the bullish monthly signals would remain valid in that case.

For a look at all of today’s economic events, check out our economic calendar.