Gold Price Breakout on Horizon as Bears Lose Grip
The gold price is showing signs of strength after a recent pullback, and analysts believe it may be nearing a bullish reversal. The spot gold daily chart indicates that the larger trend structure remains intact, with a falling-wedge breakout still in play. This pattern triggered on Friday when the price broke above the top boundary line, and since then, strong support has been established at the confluence of several indicators.
The recent bearish correction may have completed with a higher swing low of $4,235 generated last week, suggesting that the pullback is coming to an end. A decisive advance above Wednesday's high of $4,369 would be the next sign of strength on the daily timeframe, and if achieved, it could quickly reclaim the 20-day moving average.
If gold is able to rise above last week's high of $4,400, a bullish continuation signal will be generated, and the next upside target would then be the initial target derived from the wedge pattern at $4,511. The breakout above $4,400 opens up this potential for a significant move higher.