Next target – 2,772
Nevertheless, gold is quickly approaching a higher risk zone, which could lead to a retracement given the gains from the low at 2,582 (C). It would be healthy for the advance to take a break and retreat or consolidate in preparation for a breakout attempt above 2,790. The next target zone is derived from a rising ABCD pattern that reaches its first target at 2,772. At that high, gold will rise 194.3 points or 7.5% from the low of 2,582.
This would put the performance of the current upswing around the average of the previous five upswings. The relationship between fluctuations shows price symmetry or similarity. In other words, the likelihood of resistance leading to a standstill or withdrawal increases as a similar target distance is approached. These figures are approximate and may vary slightly depending on the price or percentage depending on the swing.
Double monthly bull breakouts
Tuesday’s rally sparked an inside-month break on the monthly chart as it breached the December high of 2,726. Furthermore, today’s rise brought back November’s monthly high of 2,762. Any increase above a previous monthly high is further evidence supporting the bull trend. Breakouts of two monthly highs in two days demonstrate the strength of demand behind this rally. A daily close above 2,762 will provide further bullish evidence.
The stronger the demand, the greater the chance that the long-term bull trend can continue to develop by surpassing the current record high of 2,790. However, this does not mean that the trend is going directly there. Therefore, it is important to monitor price behavior around key price levels to gauge the extent of supply and demand and the potential significance of a price level or range.
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