The next target zone is 2,594 to 2,605
There are two patterns that point to a target zone of 2,594 to 2,605. The first price level marks the completion of an ascending ABCD pattern (purple) that started from the June swing low and extended by a 127.2% percentage. Secondly, the second level of the range is the first measurement target of the Symmetrical Triangle pattern that gold broke through on August 16th.
A decisive bullish breakout is triggered
Yesterday's bullish breakout ended a 3-week tight consolidation phase above the support of a symmetrical triangle. Recently, the purple 20-day moving average was tested and held for several days, especially yesterday, the day of the breakout. The breakout was conclusive, closing near the high of the day.
The second target zone is 2,594 to 2,605
We may see signs of resistance around 2,594 to 2,605, but an eventual breakout of that price range is possible. If this occurs, the next higher price range to watch for signs of resistance is 2,650 to 2.661, which includes the completion of a small ascending ABCD pattern at 2,660 and two Fibonacci extension targets.
The larger ABCD pattern (purple) has a 161.8% extension target of 2,661. Additionally, the longer-term target level is 2,650, which indicates the 227.2% extension retracement of the bearish correction that began from the swing high in March 2022. Of course, there are higher possible targets, but let's first see how gold manages the first two.
Support Levels
The recent high near 2,532 is potential support on any pullback. However, today's low of 2,257 is the first price level to watch. Given that the market has seen the 20-day line as support recently, we should continue to see the 20-day line as potential support going forward.
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