Gold (XAU/USD) Price Forecast: Breakout Extends Eight-Week Rally, Support Holds Strong

Gold Breakout Confirms Long-Term Bull Trend

With gold futures closed for Christmas holiday, today is a good day to consider price levels and patterns indicated in the weekly chart. A long-term bull breakout triggered this week and will confirm with a Friday closing price above the prior trend high of $4,381. That looks likely given Wednesday’s closing at $4,479, in the top third of the week’s trading range. Gold is set to complete an eight-week advance following a brief two-week pullback in October. With a new trend high breakout to $4,526 and strong weekly close, gold is set to continue its advance.

Short-Term Pullback Risk and Support Levels

In the short-term, however, a pullback to test prior resistance as support – the first pullback after the breakout – is a risk. A first, more significant upside target at 127.2.% extension of the prior pullback is at $4,516. That is essentially a match to the high for the week to date, especially given a mild bearish reaction that followed Wednesday’s high. The prior high of $4,381, along with the 10-day average, now at $4,360 and rising, presents a first more significant potential support zone. A bullish reversal ending a pullback higher than $4,381, would suggest sustained strong support.

Current Advance Could Be Early in Larger Leg Up

When considering prior upswings in the price of gold, the current eight-week advance may still be early in the current leg up that began from the October swing low, given gains seen since then. Out of the four prior new trend highs sustained since 2024, time ranges are indicated at 5 and 6 weeks, and then at 11 and 12 weeks. Keep in mind that the first week of a new high breakout has yet to complete. This leaves potential in time and price.

Momentum Strength and Next Upside Targets

In addition to the rising slope of the bull trend, strong bullish momentum is indicated by a successful second breakout through the top of a rising trend channel. This confirms strength in the current advance. At the same time, it shows the price becoming further extended. Nevertheless, the potential for a continuation of the trend with a higher rate of change is suggested by the pattern. The next upside target for gold is at the 161.8% projection of a rising ABCD pattern. Further up is a large confluence zone starting at $4,664 and up to $4,713.

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