Gold Price Momentum: Essential Levels to Watch as Precious Metal Nears New Heights

Key Insights

• Gold continues to capture market attention as it approaches historic price peaks, propelled by factors like currency devaluation concerns and geopolitical instability.
• The metal’s breakout from a consolidation rectangle in July signals a sustained bullish trend, reinforcing confidence among investors.
• Technical analysis points to prospective price targets near $2,862 and $3,195 based on measuring principles and bar pattern projections.
• During market pullbacks, the $2,414 price zone represents a significant support level, coinciding with the rectangle’s upper trendline and likely attracting buying interest.

Gold remains a focal asset as it nears unprecedented highs, driven by ongoing economic stimuli and global uncertainties. The Federal Reserve’s recent half-point rate cut and China’s aggressive economic support measures have bolstered gold’s appeal as a safe haven.

Heightened geopolitical tensions in the Middle East further enhance gold’s status as a protective investment, underpinning its upward trajectory.

Below, we analyze gold’s weekly chart technicals and highlight pivotal price points to monitor during this historic bull run.

Continuation of Rectangle Breakout Rally

Following its breakout from a consolidation rectangle in July, gold has maintained robust upward momentum, signaling a continuation of its strong bullish trend.

While the Relative Strength Index (RSI) nearing 80 confirms strong buying pressure, it also suggests potential short-term profit-taking as investors capitalize on gains.

We identify key price targets using measuring principles and bar pattern analysis, alongside critical retracement levels to observe.

Projected Price Target via Measuring Principle

The measuring principle estimates gold’s potential upward movement by adding the height of the preceding uptrend to the rectangle’s breakout point.

For instance, adding $448 to the breakout level at $2,414 projects a target near $2,862.

Bars Pattern Forecast

Utilizing historical price movements from May 2019 to July 2020, repositioned from the February 2024 low, the bars pattern anticipates a longer-term gold price around $3,195.

This approach mirrors the current breakout, following a prolonged consolidation phase, suggesting sustained bullish momentum.

Critical Retracement Level

During price corrections, the $2,414 level serves as a crucial support area, likely to attract buyers near the rectangle’s upper trendline.

This level may also align with the ascending 50-week moving average, reinforcing its significance.

Disclaimer: The analysis provided is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult professionals before making investment decisions.

As of this publication, the author holds no positions in the discussed securities.

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