ABCD Extended Target Revisited
A key point to consider is that today’s high was slightly above the prior trend high at $2,882 and that resistance was seen closer therefore to the rising ABCD pattern target at $2,889, as shown on the chart. The ABCD pattern looks to identify similar or harmonic relationships between consecutive upswings or downswings.
Once those relationships are met a potential pivot level is identified. The $2,889 target is 161.8% (golden ratio) of the price change seen in the first advance, labeled AB. Given today’s bearish reaction, it looks like gold is recognizing that resistance zone.
Pullback Likely
Given the strong rally in gold, it would be healthy for the bull trend to take a rest and either retrace or consolidate before it prices move higher. An obvious potential support zone is around the prior high of $2,790. That price level can be combined with this week’s low at $2,772 and the 38.2% Fibonacci retracement at $2,776. Together, they present a price zone from $2,790 to $2,772.
Since the 20-Day MA has been rising, it is also not far away from that price zone, now at 2,764. Upward momentum improved once the 20-Day line was reclaimed in early-January. Since then, the 20-Day line has not been tested as support. Certainly, it might during the upcoming bearish retracement, if that is what occurs.
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Source: Gold Price Forecast: Hits Record High Before Bearish Reversal
