Gold Price Forecast: Key Support Tested at Symmetrical Triangle's Top

Gold Price Outlook: Key Support and Resistance Levels

Gold pulled back to a low of 2,471 on Thursday before finding support and bouncing intraday. The decline successfully tested support at the top boundary line of the symmetrical triangle pattern as price was rejected to the upside. A bullish breakout of the triangle consolidation pattern triggered last Friday.

Typical Behavior of Price in an Uptrend

It is typical of an uptrend to pull back to test prior resistance areas as support following a bullish breakout. The ideal maximum pullback is to the top boundary line. If gold can reverse higher from here, it should continue to progress its uptrend, initially with a breakout above 2,532. This is common in most breakouts.

Understanding the Breakout Dynamics

The bull breakout of the symmetrical triangle occurred relatively early in its formation, showing strength and suggesting that support from the pattern may not be as strong as a breakout closer to the apex would be. Nevertheless, the breakout is technically viable and points to higher prices for gold.

Key Support Levels to Watch

• The lower is the 20-Day MA at 2,446.
• The top boundary line of the triangle continues to mark an area of interest for buyers.
• Weekly support was seen last week at a low of 2,424.
• Important swing highs to consider: 2,450 from May 20, 2,431 from April 12.

Indicators of Potential Breakout Failure

A decline below 2,446 indicates potential failure of the breakout. This price level plays a crucial role as a horizontal center of the triangle. If approached, a drop below it would jeopardize the bullish breakout. A decline through the bottom boundary line would confirm a failure of the bull move.

Keep Updated on Economic Events

For a look at all of today’s economic events, check out our economic calendar.