Gold Price Forecast: XAU Bull Flag Breakout Begins To Pull Back

GOLD WEEKLY PRICE CHART: THE NINE-MONTH BULL FLAG

Gold weekly price chart

Chart prepared by James StanleyGold on Tradingview

GOLD PRICES: THE MARCH PIVOT

It was the month of March when things began to turn around. Bears remained in-control early in the month, but a low was set at $1680 that was soon revisited a couple of weeks later. At the time, I alerted to the build of a possible double bottom formation which, if it came to fruition, was really exciting because there was finally a short-term justification for strength on the basis of that formation. Double bottoms are often followed with the aim of bullish reversals, but for that to fill in – buyers would need to pose a break of the neckline of the formation.

That happened in mid-April, and a couple of weeks later there was even a pullback to support at prior resistance.

Since then bulls have very much been in the driver’s seat on the matter, pushing prices up to a fresh four-month-high as the focus shifts away from cryptocurrencies and back towards Gold prices.

GOLD DAILY PRICE CHART

Gold Daily Price Chart

Chart prepared by James Stanley; Gold on Tradingview

GOLD GOES OVERBOUGHT – WHAT NEXT?

On that same daily chart, RSI is currently showing an overbought reading. This doesn’t necessarily portend a reversal. It does, however, highlight that now may not be the best time to look at firing on fresh bullish positions. To be sure, the trend remains attractive. But buyers may want to try to exercise a bit of patience here, especially as the US Dollar grinds into its own support.

On the below chart, I’ve identified three potential support zones for bullish continuation scenarios. The nearest, at 1890, is in-play right now. But, below that is another swing of interest around 1874. And lastly, that big spot of prior resistance around 1860 can be approached as an ‘s3’ zone of support. This may come in play if that PCE release on Friday comes out hot, which could bring a quick run of USD-strength that may allow for that ‘s3’ support inflection.

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Almoni33 2 months ago Member's comment

You have a detailed understanding of small timeframes, but it would be nice to zoom out and say yes, I see gold at 2600 or the opposite at 1460, but you are silent.