The first target is 2,724
The first target zone is the initial target for a rising ABCD pattern at 2,724, as shown in purple on the chart. It would be an obvious point to see resistance that could lead to a pullback. If it is then exceeded, 2,754 is next on the agenda. Reaching that price level completes an extended 250% retracement of the bearish correction that started from the March 2022 peak. Also keep an eye on the rising trendline of the upper parallel channel as it can provide additional clues as the two price levels become approached.
Bull Flag points to 2,815
Nevertheless, the measurement target calculation for the bull flag infers a higher potential target of 2,815. The breakout for the flag was triggered after a successful test of support at the 20-day MA earlier in the session. That was the launching pad. There is also a slightly earlier target, slightly lower than the flag target of 2,797. That price level will compete with a 200% retrace of the bearish correction that started from the 2011 peak at 1,921.
First support to watch at breakout level 2,686
On the other hand, a drop below the current low of 2,692 signals near-term weakness and could lead to a deeper pullback. The break to new highs occurred above 2,686 and it is an obvious potential target to test as support. Nevertheless, a deeper pullback seems likely if it happens before new highs for gold, as there has only been one bullish follow-through day, and that was today. The key will be the 20-day MA. Since the 20-day MA was reclaimed on August 8, it has done well to identify an area of trend support. Therefore, the country must continue to do this and if it does not, it is a warning sign.
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