Additional Signs of Strength Needed
If gold can continue to recover from the pullback, it is set up for a continuation of momentum unleashed with a bull flag breakout that triggered on Monday. Pullbacks of some degree follow breakouts and once complete the primary trend should be ready to resume. But the characteristics of the resumption can vary. So, regardless of the pattern and its bullish implications, there are quick and aggressive resumptions of the bull trend that may occur, as well as weaker signs.
Solid Launch Pad
The short trendline across the bottom of the immediate upswing reflects the increase in bullish momentum for the trend that began from the 2022 bottoms. It helps illustrate how buyers have become more aggressive over time as expectations for gold prices become more optimistic and widespread.
Moreover, a breakout of some degree followed by a pullback and successful test of support around the 20-Day MA, can help provide a solid launch pad for the next run. If today’s low of $3,275 is confirmed as a higher swing low by a breakout above today’s high next week, it provides a significant near-term support level as it a higher swing low in the developing trend.
Higher Targets
A breakout above today’s high would provide the next bullish signal and put gold in a solid position to challenge and likely exceed this week’s high of $3,439. Nonetheless, the trend high of $3,500 needs to be exceeded for a solid trend continuation signal. Upside price targets start at a 127.2% Fibonacci extension level of $3,581 and go up to the bull flag estimated target at $3,794.
For a look at all of today’s economic events, check out our economic calendar.
Source: Gold Price Forecast: Bull Flag Breakout Sets Gold Up for Further Gains
