Gold Prices Poised to Breakout Again with Similar Pattern
After the recent pennant breakout on April 4, gold prices surged by up to 2.9%, reaching a high of 2,049. With a similar percentage move, gold could reach up to 2,064, which is just shy of its all-time high at 2,070. However, experts believe that higher prices are also possible after that.
If gold retraces slightly and tests support at the top of the pennant, that is the right time to look for bullish setups. This retracement will mark the exact support that happened during the impulse move off the second March bottom. So, it presents a profitable opportunity for gold traders to consider.
Maintain a Close Eye on the 34-Day Line Trend Indicator
It is interesting to note that the 34-Day line touches the lower trendline of the pennant, thereby testing its support level since gold went back above it in March. This could represent another piece of evidence that the consolidation phase has come to an end, leading to a continuation of the uptrend. As such, traders must pay close attention to this trend line for future price predictions.
Watch for a Momentum Trendline Break Bullish
Furthermore, a breakout of the RSI above its downtrend line will also indicate more significant strength, along with a daily close above Tuesday’s high of 2,019. To understand better where we are in the gold market, let’s take a look at the first impulse wave that started from the swing low in November. It showed a sharp rally, followed by a rising consolidation phase, and then another sharp rally. A similar trend could occur in the current rising consolidation phase, leading to another advance.
For more information on economic events and their impact on gold prices, check out our comprehensive economic calendar.
