Gold’s bullish trend remains firmly intact following two significant breakouts that have reinforced its upward trajectory. As buyers continue to defend key support levels, gold is poised for potential gains toward new price targets of $3,298, $3,335, and $3,355.
On Tuesday, gold maintained its bullish stance as it consolidated within Monday’s price range, with a high of $3,233 and a low of $3,208. Monday’s high marked a new record of $3,246, edging slightly above last week’s peak of $3,245. This price action confirms that gold is holding its ground, especially as support was observed at a key trend channel line (denoted in blue). This line was broken on Friday, and the breakout was validated with both daily and weekly closes above it.
Earlier last week, gold also saw a confirmed breakout above a larger trend channel, marked with purple lines. These breakouts demonstrate the strength of demand for gold, with the subsequent test of the upper trendline, which previously acted as resistance, signaling the possibility of a continued bullish trend.
Short-Term Weakness Below $3,194
However, there are cautionary levels to watch in the near term. A drop below Tuesday’s low would signal short-term weakness, with further vulnerability if gold dips below Monday’s low of $3,194. A more critical support zone is seen at Friday’s low of $3,173, which provides a more reliable indication of strength for the three-day price range. Additionally, the April 3 high of $3,168 remains a key reference point, as it marks the most recent breakout level for the bullish trend.
The top purple trendline, along with the 20-day moving average (currently at $3,086), are other significant support levels to keep an eye on, as they could provide crucial protection against further downside pressure.
Higher Targets: Eyes on $3,298 and Beyond
On the upside, a decisive breakout above $3,246 could propel gold toward higher price targets. The first target zone lies between $3,298 and $3,306, which is derived from short-term Fibonacci retracements. Beyond this, the next key resistance levels are $3,335 and $3,355. The $3,335 target represents a 261.8% extension of the decline from the 2011 peak, a significant level in terms of long-term price action. The $3,355 target is based on a 200% extension of an ABCD pattern originating from the August 2018 low.
Bullish Engulfing Pattern Supports Long-Term Outlook
On the weekly chart, a bullish engulfing candlestick pattern from last week further supports the continuation of the bullish trend. The pattern reflects a strong close at a new record high, underscoring the dominance of buyers in the market. The breakouts from two rising trend channels on both the daily and weekly charts reinforce the positive outlook for gold, signaling sustained demand and reinforcing the case for further gains.
As the market continues to digest these bullish signals, gold remains well-positioned to test higher targets, with key support levels ensuring that the bullish momentum remains intact for the near future.
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