Gold is still doing well and going up steadily, but there are some things to watch out for. It’s been going up in a pattern where it rises, then stays steady for a bit, then rises again. Since April 10, it’s been following this pattern while staying close to a certain level that helps show its direction. However, the energy behind its rise has decreased lately, and it’s been having trouble keeping up the upward momentum. Today, it reached a high point for the past five days, but it looks like it might end the day weaker than expected.
Fibonacci Confluence Zone Hinders Advancement
Last week, gold reached a new highest point of 2,431, but it couldn’t go further because it hit a barrier made by a certain pattern called Fibonacci confluence. This pattern shows where different targets line up, making it harder for gold to keep going up. On the same day, gold didn’t react well to hitting this barrier, and it ended the day weaker than expected. This isn’t a good sign for gold’s future growth. Despite this, people who want to buy gold are still interested, even though this week gold hasn’t been able to reach that high point again.
Inside Week: Setting the Stage for Gold’s Next Move
This week is ending with the price of gold staying within the range of the previous week, which is called an “inside week.” This suggests that the market is taking a breather or consolidating at this time. Looking ahead to next week, if the price of gold goes above the highest point reached this week, which is 2,418, it could indicate a bullish signal. If this upward momentum continues, it’s likely that gold will try to reach and possibly surpass its previous highest point. The next target for an increase would be at 2,457, which is based on a specific pattern called Fibonacci extension.
In July 2020, the price of gold reached a high of 1,921, marking a full recovery from a previous downward swing. Additionally, another measure called a “measured move” points to a potential high of 2,480. These targets are shown on a chart with purple arrows. Because these targets are based on a long period of time, reaching 2,480 is a possibility, but there might be resistance around that level.
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Breakdown Signals Potential Pullback or Continued Consolidation
If the price of gold falls below the lowest point reached this week, which is 2,324, it could indicate a bearish breakdown. Another sign would be if it drops below the 8-Day line, which is around 2,368. This could be a warning signal for potential further declines. If the price continues to fall, it might find some support around the 20-Day Moving Average, which is currently at 2,301, or at the 50% retracement level, which is close by at 2,289.
However, instead of dropping back, gold might just stay around its recent highs, consolidating its position before possibly rising again.
