Gold has successfully broken through its previous resistance at $3,500, surging to an impressive new high of $3,578 on Wednesday. This price action has confirmed a continuation of the bullish trend, opening the path for further upside movement. Although some near-term consolidation is possible, the long-term outlook remains very bullish, with targets of $3,779 and $3,966 within reach.
Bullish Trend Confirms Breakout, Consolidation Likely Ahead
On the daily chart, the breakout above $3,500 has been significant, as it completed a 100% projection of the rising ABCD pattern, a key technical structure. This confirms the bullish trend and sets the stage for higher price targets. However, following such a strong rally, a pullback or consolidation may occur in the short term, as the market is showing signs of short-term overbought conditions.
Near-Term Target: $3,603
The immediate resistance target for gold lies at $3,603, which corresponds to the 127.2% Fibonacci extension from the recent bearish correction. After 10 consecutive days of upward movement since the August 20 reversal, it’s possible that a consolidation phase could precede further gains. While momentum remains strong, a pause or pullback would allow the market to regroup before pushing higher.
Long-Term Bullish Outlook: $3,779 and $3,966
The long-term outlook for gold is exceptionally positive, with the symmetrical triangle pattern suggesting a potential move toward $3,779 and, possibly, $3,966. These levels are derived from the change in price that has been projected based on the breakout’s magnitude. As the overall market sentiment remains bullish, these targets represent achievable levels for gold over the coming months, especially if the breakout maintains its strength.
Key Support Levels
In the event of a pullback, gold has strong support levels that could act as a foundation for further gains. The first level to watch is the breakout point at $3,500. Additional support lies at the prior swing highs, ranging between $3,451 and $3,409. Holding above these levels would indicate healthy consolidation within a bull trend, paving the way for another leg higher.
Outlook Summary
Gold’s recent rally is a result of solid underlying demand, supported by expectations of continued Fed rate cuts and geopolitical factors. Although a short-term pullback may be in store, the overall trend remains strongly bullish, and the path to $3,779 and $3,966 is still clear. Investors should watch for any pullbacks to find support at key levels, as they would present opportunities for further upside in the medium to long term.
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