After hitting the record of $2,484 on Tuesday, gold prices have been pulled back further, dropping below Wednesday’s low of 2,451 and reaching a low of 2,440. It is heading toward a test of key support levels even before launching toward the upside target of $2,495.
There are several initial price levels where possible support may show up. The first is the April 12 swing high of 2,431. Below that is the 38.2% Fibonacci retracement at 2,411, and the last is the 50% retracement at 2,389.
The 2,389 price level can also be a support, as it is a match with a prior interim swing high from June 7 and is above all the trendlines. If we want a nice bullish continuation, we can do a pullback to test that price zone as a support.
This week’s new record high has achieved a long-term target for gold from a rising ABCD pattern at 2,480. This pattern began in August 2018 with a swing low of 1,160, then a high of 2,013 in August 2020, and a swing low of 1,615 in September 2022, which ended this week.
Thus, following this bearish replacement in the price, gold is expected to trend higher toward upside targets.
Around the 2,487 price level, there is a Fibonacci confluence area with several prices. Just a little further from that is 2,495, which will complete a 100%, or 127.2%, extended retracement.
