The resistance holds approximately 250% extension
Resistance has been seen around the completion of an extended 250% retracement measuring the March 2022 downturn. Also, the top line of an ascending trend channel marks a similar price area. But given the signs of continued strength, it appears gold wants to go even higher before a notable pullback occurs. Either way, a signal is needed before anything is indicated. A bullish signal emerges with a decisive rally above the record high of 2,758.
Breakout above 2,758 Targets 2,797
If the price continues to rise from there, gold will likely head towards a price range of 2,797 to 2,815. The range consists of a 200% extended retracement of the decline that started from the 2011 peak. Next is 2,808, the 261.8% extended retracement of the decline from the March 2022 peak. Finally, the price range ends with an estimated target of 2,815 based on the bull flag pattern that activated last week.
Support Next at 2,686
On the other hand, a breakdown below 2,758 could lead to a test of support at lower prices. The last breakout level was at the previous trend high of 2,686 and could now see support. Next, the critical 20-day MA for the short-term trend is at 2,674. Note that the 20-day line was tested on the first flag outbreak day before rising above the upper flag boundary line. A break below the 20-day line could ultimately test the 50-day MA at 2,599 as support.
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