Rising ABCD Pattern Targets

A rising ABCD pattern on the chart marks recent swings, but considers the $4,842 swing low to be contained within the CD leg of the formation. This is a judgement call, based on the decisiveness expressed in the first leg up from the bottom. With the measurement, an initial upside target is shown at $5,345. That is where the CD advance matches the rise in price seen in the AB leg.

Once that occurs, a potential pivot is identified. This target has greater significance in addition to a 100% ABCD target. The price matches a 78.6% Fibonacci retracement of the bearish correction. When two indicators identify a similar price level, that price area takes on greater significance as support or resistance. In this case, it is resistance.

Potential Upside Toward Record High

Could gold continue to rise towards the $5,598 record high? Certainly, the reclaim of the moving averages indicates a recovery of those averages as support. The relationship shows demand improving as higher prices are recovered.

It could be argued that the recent sharp 21.4% bearish correction has reached a bottom. Support was seen at the confluence of the 50-day moving average and the top of a long-term rising channel. A bounce from $4,402 confirmed support at prior resistance from the channel. Together, the bullish response from these indicators suggests the correction may be complete, reinforcing the potential for further upside.

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