Gold (XAU/USD) Price Forecast: Breaks Out of Pennant, Eyes Record High

Gold triggered an initial breakout of a bull pennant trend continuation pattern on Tuesday. It reached a high of $3,433, at the time of this writing, and may get higher before the session ends as trading continues near the highs. A closing price above the top boundary line of the pennant will confirm the initial breakout, and it looks like that will happen.

However, a breakout through a line without additional confirmation is risky. Especially since there is another resistance zone from $3,439 to $3,451. The top level carries greater weight as it was the second highest swing high historically for gold and it is part of price structure of the pennant.

Breakout Above $3,451 Needed Next

A decisive breakout through the $3,451 swing high triggers a continuation of the trend, which then needs further confirmation on a rally above the record high of $3,500. An initial new high target is shown on the chart at the completion of a rising ABCD pattern. That is a relatively short-term pattern and therefore it has a good chance of eventually being achieved following a new high breakout. There are additional Fibonacci extension and projection levels showing the potential for resistance around $3,594 and $3,664.

Measured Move Target

There was a sharp three-week rally that preceded the pennant consolidation pattern. Once the current advance matches the price gain during that advance, a potential pivot resistance level is marked. The current advance matches the prior rally, around $3,664 on a price basis and near $3,690 on a percentage basis. The measures can be seen on the chart with rising light blue arrows. Of course, there are higher potential targets in the gold, which will be looked at on future days.

Bullish On All Time Frames

Gold is bullish on all time frames and set to trigger a continuation of its long-term bull trend. The current bigger picture advance began in February 2024 following a pullback from an earlier bull breakout of a long-term basing pattern. The long-term breakout took a little time to get going but once it did a new phase of the bull trend began. A breakout of a long-term base can see similar behavior to when an asset is beginning a rally from a bottom. So far, that has been the case for gold.

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