Bull Flag Breakout
The breakout of the Bull Flag reached $3,202, though it followed a fairly small pullback. Support was established where the 20-day moving average met the 50% retracement level. Given the positive reaction after testing this support region, it may be considered a reliable point for future support. The bullish activity around the 20-day moving average reinforces the ongoing upward trend in gold prices.
Strong Momentum
Gold prices experienced a notable increase after hitting a swing low of $2,956 on April 7. Within 10 days, the prices climbed 19%, or $557. While similar gains might not happen immediately following the Bull Flag Trigger, the current market phase suggests that prices could rise significantly as it nears completion. This sets the stage for a potential climb past $3,500.
New Highs Indicate $3,581
However, this upward movement should first be viewed as a possible resistance point. The momentum initiated from Monday’s low is promising, and as prices increase, they might withstand strong bullish pressure. There’s definitely potential here. The recent Fibonacci extension from the bearish correction suggests a target of $3,581, based on a 127.2% measurement, while a 161.8% expansion calculation indicates a possible increase target of $3,684. The bullish potential indicated by the flag illustrates the likelihood of increased purchasing activity as gold progresses in this long-term upward trend.
For a complete overview of today’s economic events, refer to the Economic calendar.
