Signs of Further Strength Needed
If gold manages to rebound from its recent dip, it could continue the momentum that started with the bull flag breakout earlier this week. After such breakouts, pullbacks are common, and once they occur, the main trends often resume. Yet, the way these trends resume can differ. So, even with bullish patterns, there could be sudden and sharp drops along with faint signals of potential upward trends.
Strong Foundation
The short trend line found at the base of a recent rise indicates the bullish energy stemming from the end of 2022. It shows how buyers have become increasingly aggressive, driven by growing optimism about future gold prices.
Moreover, a breakout that is followed by successful retests of pullbacks and support around the 20-day moving average would serve as a strong foundation for the next upward move. If today’s low of $3,275 is confirmed as a lower swing due to a breakout that exceeds next week’s high, it will create significant short-term support as it marks a lower swing in the ongoing trend.
Elevated Targets
A breakout that moves beyond today’s highs could signal the next bullish phase for gold, potentially pushing past this week’s high of $3,439. However, for a sustained indication of robust trends, it needs to breach the $3,500 mark. The upside price target begins at the Fibonacci extension level of $3,581 at 127.2% and reaches the forecasted Bull Flag target of $3,794.
For today’s economic events, see the Economic calendar.
