Gold Price Forecast: Set to Close at New High, Higher Targets in Sight

Gold reached the 2,277-target zone today on a new trend high. This is the fifth day up for gold and it is set to close at a new record high again today, Tuesday. Momentum remains strong and although there might be a pause before prices move higher, demand should remain strong to help drive gold to higher targets.

Strong Bullish Breakout Led the Way

Note that there was a strong rally of 167 points or 8.2% that occurred in a short seven-day period prior to the most recent correction. The correction took the form of a bullish falling wedge. Once the sharp advance began it triggered a breakout of a symmetrical triangle pattern. In addition to the bullish breakout of the triangle there were several other indications that the move may have greater power than might be expected.

Price Level that Began Base Shows Again at the End

Look at the dashed black line at the triangle breakout area. It marks the resistance level seen at a prior record high from August 2020 at 2,031. That was the beginning of a multi-year basing pattern. It was just completed last week as the breakout of that pattern was confirmed by a new monthly record closing high of 2,233.

The longer the base, the bigger the potential advance out of that base. Moreover, three moving averages converged around the breakout zone with the 50-Day MA being the most significant. You can see how the 50-Day line was almost an exact match for the downtrend line that defines the upper boundary of the triangle.

Wedge Target Shows 2,320

When calculating a measuring objective from the pattern as would be done with a bull flag or bull pennant, a potential target of around 2,320 is indicated. That looks to be where gold is currently heading before a longer and more significant correction or consolidation kicks in. Nevertheless, caution is always warranted as getting targets right is one of the more difficult components of analysis. A daily close above today’s high of 2,277 (currently) will provide the next confirmation of strength that could lead to a continuation higher.

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