Strong Weekly Bull Trend

The current advance in the price of gold, beginning from the November swing low, shows an acceleration of bullish momentum. This can be seen by the rising slope of the trendlines. That may put the trend at greater risk as momentum becomes less sustainable, but the weekly chart shows the strong trend is intact. The recent decline that generated a new swing low at $3,268 found support and rallied from the 20-Week MA. That was the first test of support at that weekly moving average and gold responded in bullish fashion. A weekly bullish reversal triggered this week, and it will be confirmed on a weekly basis by a weekly close above last week’s high of $3,363.

Resistance or Breakout?

An upside breakout of the triangle is indicated on a decisive rally above the recent swing high at $3,439. That would open the door to a challenge of the trend high at $3,500 and the potential for new record highs. However, given the distance to the apex of the triangle, consolidation could continue before a sustained breakout is attempted.

At the time, a vertical line on the chart shows August 21. That is a visual approximately of when 75% of the triangle has been filled. Typically, a breakout of a triangle will occur before that point is reached. And concurrently, the integrity of the pattern begins to weaken and therefore the potential response to a breakout, either up or down.

Support Zones

A key potential support area to watch would be around the 20-Day and 50-Day MA, currently at $3,353 and $3,347, respectively. Also, consider the possibility of a false breakdown through the bottom boundary line and then a quick recovery and rally.

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