Gold (XAU/USD) Price Forecast: Tests Moving Average Resistance Within Symmetrical Triangle

Gold remains in a holding pattern, trading near the resistance of both the 20-Day and 50-Day moving averages. Wednesday saw a bullish reversal signal as prices climbed to a high of $3,371, surpassing Tuesday’s $3,359 peak. That rally also produced a higher daily high and low, suggesting short-term bullish momentum.

A daily close above $3,359 would confirm the reversal and likely put gold back above both moving averages. The 20-Day MA, now at $3,357, marks the upper end of the immediate range, and a close above it could open the door to a test of the recent lower swing high at $3,409 and the top boundary of a developing symmetrical triangle pattern.

Symmetrical Triangle Forms Near Long-Term Highs

The triangle pattern has formed near the top of gold’s long-term uptrend, generally signaling potential for an eventual upside breakout. Yet its clarity also means surprises are possible. A breakout that fails could quickly reverse, leading to a sharp swing in the opposite direction. Traders should remain aware of this scenario, as it has precedent. Last month, a smaller symmetrical triangle broke briefly before reversing, and then a breakdown also failed to follow through.

This led to the expanded current wider consolidation range. Patterns observed near major highs can lead to increased market volatility when false breakouts happen, highlighting the importance of effective risk management.

Key Levels for Breakout and Breakdown

The triangle boundaries are defined by trendlines connecting recent swing highs and lows. An upside breakout would require a move above $3,409, followed by a push through $3,439. On the downside, a break below the lower boundary, confirmed by a drop beneath the recent higher swing low at $3,268, would show control of the bears and could lead to a deeper retracement.

Possible Downside Targets

If $3,268 fails as support, the next area of interest is the 38.2% Fibonacci retracement from the earlier $3,500 record high, which would act as a potential minimum downside target. While this level may hold, traders should be aware that failed breakouts or sudden reversals can push momentum further, making it important to monitor price action closely and adjust strategies as conditions evolve.

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