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Gold Price Forecast: Triggers Weekly Bullish Reversal, Targets Higher Levels

Gold triggers a weekly bullish reversal on Thursday with a rally above last week’s high of 2,364. A daily close above that price level will confirm the breakout. Once confirmed, the chance for further strengthening improves. At the time of this writing gold had reached a high of 2,378 for the day. Also, the 20-Day MA, which has acted as resistance recently, was busted to the upside. The 20-Day line is now at 2,362. If it holds as support during pullbacks, gold should be ready to continue its way higher.

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Upside Breakout of Consolidation
Today’s advance triggered a breakout of a falling flag type pattern marked by two declining parallel lines on the chart. It reflects similar price action as seen in a falling bullish wedge pattern. Since a swing low is now indicated at 2,315, a rising ABCD pattern has been added to the chart. It provides an initial target of 2,487. That is where the price advance seen in the CD leg of the pattern matches the move in the AB portion. Once price symmetry is matched a pivot level is identified. That 2,487-price target area is confirmed by several Fibonacci targets. However, there are lower Fibonacci targets as well at 2,462 and 2,480 that are derived from longer Fibonacci measurements.

20-Day MA Should Now Mark Trend Support
The relationship with the 20-Day MA will now take on a greater significance as it should act as support during weakness since today’s breakout is decisive. Nonetheless, the strength or weakness of the day’s close will provide greater clarity. Also, Thursday’s low of 2,353 is a near-term support level to keep an eye on. A break below it may follow a drop below the 20-Day line, if it was to occur.

50-Day MA Also Important
Support was seen around the 50-Day MA over the past six days with a swing low during the period at 2,315. It should also be watched during pullbacks. If gold stays above the 50-Day line, it is signaling higher prices and a continuation of the bull trend. On a monthly basis, for the month of June gold has been trading inside the trading range from May. It could continue to do so throughout the month rather than clearly progressing higher from current price levels.

Source: Fxempire