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Targets Key Pivot Around $3,375
Furthermore, a sustained advance above $3,375 will signal a breakout of the trendline for the current correction, as well as the top line of a longer-term rising trend channel (blue). An upside breakout from the channel triggered on April 11 but subsequently showed signs of failure during the current bearish correction as gold fell back into the range of the channel. A recovery above $3,375 would put gold back above the top channel line and provide a second bullish channel breakout signal.
Bullish Signs Build
There was also an earlier bullish channel, marked with purple trendlines, that initially triggered on March 31. Although that breakout failed it was followed by a second upside breakout on April 10 that had greater success as it led to the new record high of $3,500 later that month. Furthermore, the recent pullback completed a successful test of support around that line. Once prior resistance is tested as support and then followed by strength, it is a bullish sign.
Weekly Bullish Reversal Strengthens
Also bullish is a weekly bullish reversal that triggered this week. It has been confirmed on a daily basis and if gold can close above last week’s high of $3,292 this week, it will be confirmed on that higher time frame weekly. In addition, the highest weekly closing price for gold was $3,327. If gold can retain strength heading into Friday, it has a chance for a record weekly high closing price.
Finally, the monthly pattern for gold is currently an inside month and it looks like this month will probably end with the same. On a monthly basis, an inside month is a rest in a bullish trend pattern and reflects consolidation on that timeframe. May’s high so far is $3,439 and the low was $3,121.
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