Upside Breakout Levels

An upside breakout of the consolidation triangle as it is currently configured is initially triggered above the top trendline but more reliable on a rise above the lower swing high at $4,245. That breakout level confirms a triangle breakout as well as generating a higher swing high and continuation of the bull trend begun from the October swing low. A rising ABCD pattern on the chart shows an initial 78.6% harmonic target for the pattern at $4,280, while price symmetry between the two rising measured moves completes at $4,356. This makes those two price levels the first upside targets on a breakout above the high for November at $4,245 (B).

Near-Term Trigger

However, an initial signal for a continuation of the bull trend towards the $4,245 high is on a sustained breakout above Wednesday’s high and the current high of the CD leg of the advance at $4,173. The breakout will need to prove itself once triggered, with a clear pick-up in bullish momentum.

Weekly Bullish Context

The weekly chart shows a bullish view, with a higher weekly high and higher low established following another successful test of support at the 20-day moving average. That is consistent with dynamic support near the longer-view 10-week average. A weekly close above last week’s high of $4,133 will confirm the weekly bull breakout and show buyers in control on that time frame. Subsequently, if gold stays above this week’s low of $4,040, the potential for the long-term bull trend to resume remains the most likely possibility for now.

Outlook

Tighter risk management can be achieved by the 20-day average support indicated at $4,075 currently and rising again after a slightly bearish decline. The more significant potential dynamic support line is at the 50-day average at $4,019. A decisive move above $4,173–$4,245 targets $4,280–$4,356; failure to clear the downtrend line risks a lower swing high and test of $4,075 – $4,040.

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