Gold Prices Hit Record High, But Risk of Pullback Looms
Gold prices surged to a new all-time high on Wednesday, breaking through the critical resistance level of $3,043, reaching $3,052. This marks the fourth record high in five days. The day’s trading saw a relatively narrow range, with a low of $3,023. A strong closing price on Wednesday would confirm the upward momentum, positioning gold for further gains.
Resistance Zone Overcome
The recent price movement also shattered a key resistance zone around $3,043. If gold closes above this level, it will strengthen the bullish trend. The next potential target is $3,078, which aligns with the 261.8% extension of a rising ABCD pattern that started last November. This target also coincides with resistance near two upper trend channel lines, which may act as key levels to watch.
Bullish Outlook but Risk of Correction
Despite the strong performance, gold appears to be overextended, suggesting a pullback or rest period may be imminent. Whether the price will continue above $3,043 or face resistance at this level remains uncertain. However, this week marks the third consecutive week of higher highs and higher lows, solidifying a bullish trend. A weekly close above last week’s high of $3,005 would confirm a breakout.
Support Levels
Short-term support is at $3,023, with weekly support at $2,982. A move below either of these levels could signal a shift in direction for gold. Trend channels on the chart show rising boundaries, which can help identify overbought or oversold conditions. If the price is rejected from the upper boundary, it could eventually test the lower boundary.
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