Gold prices continue to consolidate near recent highs, with a potential breakout above $2,773 signaling further strength. Key support stands at $2,702, while upside targets extend to $2,823 and beyond.
Gold Consolidates Near Highs – Is a Breakout Imminent?
On Wednesday, gold remained in a tight range, forming a higher daily low and a slightly higher daily high—indicating ongoing support. Despite testing resistance at Tuesday’s high of $2,765, price action stayed within a narrow range of $2,745 to $2,766. More market activity is needed to confirm a breakout.
Breakout Above $2,773 Signals Strength
A rise above $2,765, followed by a decisive move past Monday’s high of $2,773, would confirm bullish momentum. If gold surpasses the recent peak of $2,786, it could continue its uptrend, with a key target at the record high of $2,790. A further breakout could push prices toward $2,823, backed by two technical indicators:
- A 261.8% Fibonacci extension of an ABCD pattern originating from October 2023 lows.
- A more recent ABCD pattern (purple) reaching its 127.2% extension.
Beyond $2,823, the next resistance level appears at $2,856, suggesting further potential upside for gold bulls.
Monthly Bull Breakout Confirmation
As January nears completion, the monthly chart gains significance. A breakout above December’s high of $2,726 has already been triggered, while November’s high of $2,762 has also been exceeded. If gold ends January above these levels, it will confirm a bullish breakout on the longer-term monthly chart—supporting continued strength in shorter time frames.
Key Support Levels to Watch
Despite bullish signals, resistance remains, and a pullback could be on the horizon. In such a scenario, the following support levels will be critical:
- 20-Day Moving Average (MA) at $2,702: A key support level to watch.
- 50-Day MA at $2,666: A deeper retracement could test this level.
- Monthly Low of $2,615: Even a drop to this level would not invalidate the longer-term bullish outlook.
With gold showing resilience, traders will be closely watching for a breakout or potential retracement in the coming days.
