Gold has shown an attempt to break out of a small bullish wedge pattern, but momentum remains elusive as price action consolidates inside a larger symmetrical triangle. Despite breaking resistance levels briefly, the precious metal faces challenges in sustaining its upward movement.
Breakout Attempts Fall Short
On Thursday, Gold (XAU/USD) made an initial attempt to break above the resistance after pushing past Wednesday’s high of $3,350, reaching $3,352. However, this move stalled at resistance, leaving bulls with little follow-through. The volume surge confirmed increased demand for gold, and the precious metal briefly reclaimed its 20-Day and 50-Day moving averages, standing at $3,344 and $3,348, respectively. Despite the initial bullish push, the breakout remains inconclusive without consistent momentum and a decisive rally.
Momentum Still Missing for Confirmation
The breakout from the wedge pattern lacked the strength of a clear uptrend, as it formed within a broader consolidation structure rather than signaling an immediate bullish trend. For this breakout to be valid, gold needs to show improving momentum and sustained buying interest. If momentum does not pick up, the move could end up as a false signal. The key resistance zone remains close, and failure to build on Thursday’s progress may lead to renewed selling pressure.
Symmetrical Triangle Offers Directional Clarity
A larger symmetrical triangle continues to guide the technical outlook, with gold’s price action narrowing as it approaches the apex. A decisive breakout above $3,435 would confirm the beginning of the next bullish phase. A preliminary signal of strength could be seen with a move above $3,409. Additionally, a rising ABCD pattern suggests a target price of $3,452, slightly above the triangle’s bullish breakout zone. A break above these levels would mark a strong continuation of the broader uptrend.
Long-Term Outlook: A Tight Range
On the monthly chart, gold has traded within the range of April’s price movement for the fourth consecutive month. Prices peaked near $3,500 during that month, and since then, gold has formed three inside bars, indicating reduced volatility and a prevailing indecision in the market. The closing prices for the last four months have consistently clustered between $3,288 and $3,303, acting as a base of support. A definitive close above this range would carry significant technical weight, potentially setting the stage for a breakout from the symmetrical triangle and the possibility of testing higher resistance levels as we head into September.
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