Gold (XAU/USD) Price Forecast: Breakout to New High Accelerates Uptrend

New Record High Signals Accelerating Bull Trend

Gold spiked to a new record high of $4,766 on Tuesday. Bullish momentum improved as seen in the relatively wide range green candle and likely close near the top of the day. A higher daily low of $4,659 took hold within the top of Monday’s range, reflecting buyer control from early in the session. Friday’s bounce from support at the 10-day average lit the fuse into new highs suggesting the buyers may remain in control for a while longer.

Rising Momentum Confirms Strength After Breakout

Another higher daily high and low is set to follow Tuesday’s advance, triggered by a decisive rally above the day’s high. Improving bullish momentum has been expected as the new leg up in the bull trend exerts itself. In December, gold broke out of a short-term base to a new trend. The first pullback after that breakout ended with a higher swing low at $4,274 and a bounce off support near the 20-day average.

Short-Term Support Levels Guide Pullbacks

Bullish momentum subsequently improved as represented by support near the short-term 10-day average. It presents the first price area to watch for a bounce on pullbacks or a failure with a drop below the line. Tuesday’s clear advance into new highs shows demand improving as price rises further away from the 10-day line. Eventually, that distance will expand to where a pullback becomes more likely. But until then silver heads towards a minor confluence zone at $4,876 to $4,891.

Upside Targets Expand as Trend Steepens

A second upside confluence zone is identified near $4,993 to $5,000. Given the increasing angle of ascent for the uptrend, gold is entering a phase where sharp rallies can be anticipated. Global uncertainty seems to be feeding demand, and the technicals fully support higher prices. This doesn’t mean that corrections and pullbacks may not come first, as they will.

Technical Structure Suggests Further Gains Ahead

Following the breakout of a rising channel in silver, it took off supported by the 10-day average. Gold may be entering a similar accelerated phase of its trend, also supported by the 10-day average. This makes the 10-day line a key area to watch during weakness. Once it shows as support on a pullback, the chance for strength to return increases.

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