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Gold Price Forecast: Monthly Chart Indicates Strong Bullish Momentum

By:
Bruce Powers
Published: Mar 29, 2024, 20:44 GMT+00:00

The monthly chart for gold paints a bullish picture, with a cup with handle pattern and a breakout to new record highs, suggesting a potential multi-year bull run.

In this article:

Gold prices have not been in such a bullish technical position in years. Given the market holiday, today is a good day to consider the monthly time frame chart to see what clues it might be leaving about future prices. The dark green outline on the enclosed monthly chart is drawn under the price history going back to the September 2011 high and it shows a large cup with handle pattern, and specifically a high handle. A false breakout triggered in December and was followed by two months of consolidation. The subsequent March breakout confirms strength indicated by a decisive advance to a 13-year high and strong monthly close.

A graph of stock market Description automatically generated with medium confidence

Strong Monthly Close

To better illustrate the bullish nature of this development, the market for gold closed near the high of the month, which was 2,236, and it closed at a new record monthly closing high of 2,233. “This is the first month of a breakout from a multi-year base, and the strong monthly close is signaling something like, ‘This is real, pay attention.” In other words, it is early in the potential uptrend. A multi-month if not multi-year bullish run may just be starting. There is a saying in technical analysis that goes something like “the bigger the base, the bigger the breakout.”

Initial Monthly Targets

Such bullish signs in the price of gold are likely to improve bullish sentiment as more investors and traders become aware of the development. Two basic Fibonacci measurements are shown on the chart for potential target just based on the monthly chart. The first is an extension of the retracement from the March 2002 decline. It shows a target of 2,194, which is at the 127.2% extended Fibonacci level.

And it was exceeded to the upside thereby increasing the chance for prices to rise to the next higher level from the pattern to 2,297. Meanwhile, a large rising ABCD pattern shows a key pivot at 2,260. Targets or pivots are areas where the chance for a new reversal or continuation signal increases. It is an area of interest that should be viewed for clues as to changes in investor sentiment and momentum.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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