Friday’s Strength Signals Potential

Friday’s advance to $3,409 positions gold near the top of its symmetrical triangle, formed after a robust rally from the April swing low. The rise from that low to the April high and record high of $3,500, was a $543 move (18.4%). It showcased accelerated bullish momentum before consolidating.

A weekly close above $3,409 would reinforce this strength, keeping the breakout scenario alive. However, failure to sustain above the triangle’s upper trendline could trigger a pullback to test support, maintaining the pattern’s integrity for now. Given the long-term bull trend, the most likely resolution is an eventual upside breakout.

Key Levels to Monitor

The $3,439 level is critical resistance for a triangle breakout, potentially opening the door to a test of the record high at $3,500. A sustained move above $3,500 could drive gold to new trend highs, with a measured move from the July swing low of $3,268 projecting a target of $3,811. Alternatively, using the triangle’s height, a breakout could aim for $3,623.

On the downside, a pullback to the triangle’s lower trendline or support near the 20-day and 50-day moving averages ($3,355 and $3,350, respectively) remains possible. These levels, coinciding with the July low, form a key support zone to watch, plus of course the lower boundary line of the triangle.

Trading Outlook

Traders should focus on the $3,439 resistance level for breakout confirmation. A decisive close above this level signals bullish continuation, targeting $3,500 and potentially $3,623–$3,811, offering swing traders attractive entries. Conversely, a rejection at the triangle’s upper trendline could lead to a pullback toward $3,353–$3,347, where aggressive traders might seek buying opportunities. Short-term traders could fade a failed breakout if prices retreat below $3,409. With gold approaching this critical juncture, the next few sessions will determine whether it breaks out to new highs or consolidates further within the triangle pattern.

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