Gold Price Forecast: Gold Eyes New Highs with Momentum and Pattern Support

Gold triggered a continuation of the recent bull breakout on Friday, as it exceeded a prior high at $3,403 to reach a 37-day high of $3,447. This is the second highest traded historical price, other than the April 22 trend high day when gold hit a record high of $3,500. Potential resistance around a lower swing high of $3,439 was barely exceeded today. At the time of this writing, trading continues near the highs of the day and gold could trade higher before Friday’s session ends.

Stage is Set for the Bulls

The stage is set for gold to approach the $3,500 price area and the potential for a new record high for gold. Nevertheless, there is also potential resistance at $3,491, which is an initial upside target for a rising ABCD pattern (purple). If current bullish momentum is sustained into the $3,491 to $3,500 price zone, it would not be surprising to see some signs of resistance around that price zone, either consolidation of a minor pullback.

Weekly Chart is Bullish

What strengthens the bullish argument more clearly is evidenced in the weekly chart (not shown). Gold is set to establish a record high weekly closing price and confirm a five-week bull breakout with a closing above last week’s high of $3,403. This is bullish behavior on the larger timeframe and enhances near-term upside potential. Initial new highs targets start with a 127.2% projected target for the rising ABCD pattern at $3,557.

However, that is a target from a relatively short pattern, and it may be easily exceeded. A little higher will be the 127.2% extension of the more recent bearish retracement that followed the $3,500 record high. It points to $3,603. The completion of a large rising ABCD pattern (orange) shows an initial target of $3,664.

Bounce off 20-Day MA is Bullish

The fact that support was found around the 20-Day MA (purple) on three out of five days this week, is a bullish indication. It is confirmed by the subsequent acceleration in bullish momentum, which continues today. Gold has set up a potential launching pad for reaching new highs. Given growing uncertainty globally and bullish technical pattern, bullish sentiment in gold could see a sharp spike in the precious metal upon breaking to new high prices.

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