The next target is 2,772
Nevertheless, gold is approaching its next identified target, which is 2,772. That price will complete an initial objective for a bullish ABCE pattern (purple). Both the AB and CD legs up correspond to the price change on that target. Once there is symmetry in the price between the two upswings, the possibility of resistance exists. Moreover, decisive progress above that target would provide another sign of strength and increase the likelihood of a continuation of the immediate rally.
Early session selloff has been wiped out
On Thursday, gold fell slightly below Wednesday’s low, reaching the low of the day at 2,736. Buyers then took back control, leading to an intraday rally. At the time of writing, gold is expected to close strongly, in the upper third of the day’s trading range, and close to the opening price. It is possible that the current candlestick pattern completes a bullish doji hammer. That would be a bullish pattern after the failed attempt to move lower earlier in the session. It will leave gold in a solid position to move higher.
Bull signal above today’s high at 2,759
A rally above the current high at 2,759 will cause a bullish continuation of the trend, which will then need further confirmation of strength on a rally above the current trend high at 2,763. Given the potential resistance around the 2,772 target, it could get stuck there and lead to a pullback or consolidation.
On the other hand, if purchasing power remains strong and the price level of 2,772 is exceeded with enthusiasm, the record high of 2,790 is in danger of being broken upwards. It would be healthier if the trend had a small pullback or consolidation before a break above the record high. Otherwise, a breakout to new highs soon after risks losing momentum.
For a look at all of today’s economic events, check out our economic calendar.