On Wednesday, buyers surged, propelling the gold price to a fresh trend peak of 2,390. A bullish breakout was initiated on the weekly chart by surpassing last week’s peak of 2,378. Currently, the day’s peak stands at 2,390. The upward momentum today reinstated gold above a key resistance level, marked by the upper channel line, previously tested multiple times in recent weeks, signaling robustness in the precious metal. Additionally, the ongoing upward trend in silver, nearing this year’s peak, further contributes to the positive outlook.
Gold Price Forecast: Next Target Zone Set at 2,398
Next, gold may encounter resistance near the 78.6% Fibonacci retracement level at 2,398, which coincides with a significant top channel line. A breakthrough beyond 2,398 would not only surpass this resistance level but also reposition gold above both ascending parallel trend channels, following an unsuccessful breakout in early April. A rebound subsequent to a failed breakout typically sets the groundwork for a sustained uptrend towards higher price levels. The initial target following this scenario is the trend peak of 2,431. Should a clear bullish signal emerge with a decisive surge above 2,431, the subsequent target lies at the same level, marked by two Fibonacci levels.
Gold Price Analysis: Second Attempt at Channel Breakout
Should gold surpass the upper channel boundary and maintain its position, followed by additional reinforcement, it would validate its robustness. The ongoing uptrend has witnessed a swift rise in the price of natural gas. While a steep upward trajectory indicates strength, it also heightens the possibility of a significant pullback. A daily closure or sustained trading above the channel would significantly appease bullish sentiments.
Long-Term Bullish Outlook for Gold
As previously emphasized, gold is currently advancing, affirming a bullish breakout from a multi-year consolidation phase. Today’s surge signifies the breach of both the downtrend line and last week’s peak, indicating heightened buyer enthusiasm towards gold amid widening global government uncertainties. However, the possibility of a retracement persists should indications of weakness emerge. A potential early warning sign for a deeper retracement would be a decline below today’s low of 2,352.
