Gold Hits Record High Amid Bullish Momentum
Gold prices continued their upward trend on Thursday, reaching a new record high of $2,686. However, the rally may pause as resistance emerges near $2,661. Support levels are noted at $2,633 and $2,600, but a significant break above the resistance could maintain the bullish trend.
Recent Trading Performance
The price of gold has been on a six-day rally, building on a previous low of $2,547. The last four days of trading ended in the upper third of each day’s range, but Thursday’s trading has shifted to the lower half of the range. A daily close in the upper half would strengthen the bullish outlook.
Encountering Resistance
Since Tuesday’s price surge, gold has entered a potential resistance zone. This zone aligns with the targets of two ascending ABCD patterns, marking a potential pivot level around $2,661. Additionally, a smaller rising ABCD pattern set a target at $2,675, which was reached today. However, the bullish momentum has weakened, raising the possibility of a temporary peak.
Warning Signs of a Pullback
If gold prices drop below today’s low of $2,655, it could signal weakening momentum, potentially leading to a more significant pullback. Initial support during a pullback is at the 38.2% Fibonacci retracement level of $2,633. A more critical support area is identified at the 50% retracement level of $2,616, which coincides with this week’s low of $2,614.
A decline below this week’s low would suggest that sellers are taking control, increasing the likelihood of prices testing the $2,600 support level. This level is confirmed by the 61.8% Fibonacci retracement also positioned at $2,600.
Potential for Continued Rally
Despite the possibility of a pullback, there are currently no signs of a downturn. If gold manages to break decisively above today’s high of $2,686, it may signal a continuation of the bullish trend. Sustaining this advance could lead to a new price zone starting at $2,724.
This price point completes the target for a long-term ascending ABCD pattern that began from the swing low in February. Beyond $2,724, there are several potential targets, with $2,754 being significant as it represents the 250% extended retracement of the decline from the March 2022 peak.
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