Gold Pennant Nears Apex: A Potential Breakout in Sight
Gold Forecast Video for 03.04.23 by Bruce Powers
The bullish pennant in gold continues to fill as it moves closer to the apex of the triangle and a potential breakout. Given the bullish nature of the pattern an upside breakout is anticipated. It should occur within several days as one of the border lines of the pattern will be busted by day four.
Bullish Pennant in Gold Gets Closer to Breaking Out
A border line is the first level that is broken on a breakout but then a rise above prior price levels should be seen to confirm strength. The price represented by a border line is not clear but a high or low from prior price action can be specific. If the top border line of the pennant is broken then first look for confirmation of strength on a move above the March 24 high of 2,003, followed by the trend high at 2,010 from March 20.
Initial Upside Targets
Once the top price level is exceeded gold targets some minor Fibonacci levels until the price range of 2,042 to 2,044, where there is Fibonacci confluence. This is where more than one measure identifies a Fibonacci level around the same price. The big price level to watch is the record high of 2,070 from March 8 of last year. Once there is a daily close above that price level gold has confirmed a breakout of a large 12-year cup with handle basing pattern.
Pennant Price Target
If we just take the bullish pennant for now. It’s minimum target, based on the calculation of a measuring objective for the pattern, is up at 2,158. This doesn’t mean that gold will reach that price following the pennant breakout, just that it could. Other potential targets derived from other price patterns in gold will be discussed in the future.
Could Gold Fall Before Rising?
Even though the outlook in gold is bullish, the pennant could fail and break down instead of up. Let’s be prepared. A drop below the lower border line, which is current merged with the 12-Day EMA, signals a bearish pullback. The 12-Day line is currently at 1,956. At that point watch the Fibonacci retracement levels on the chart for downside targets and areas where a bullish reversal might occur.
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