Gold prices are poised to test the all-time high if the current bullish momentum continues. The precious metal gained momentum from softer CPI data and more dovish interest rate expectations, with the market anticipating two full rate cuts by the end of the year.

Previously, gold had been easing within a bearish channel until the CPI data acted as a catalyst for a potential bullish continuation. Yesterday’s daily candle closed above the trendline resistance (upper bound of the channel), indicating a revival of the longer-term bullish trend.

Key observations moving forward include a potential retest of the prior resistance, now turned support, as this is a common occurrence in breakouts. This approach helps avoid false breakouts that can trap traders. Watch for the $2360 mark to hold, which is the 1.618% Fibonacci extension of the 2020–2022 major decline. This level represents confluence resistance as it roughly aligns with the previous resistance trendline.

Gold Breakout Attempt – Focus on Bullish Continuation Plays

May 16 2024

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