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Gold prices nearly reached our previously identified target of 2374, peaking at $2371 per ounce. While a minor pullback occurred due to overbought conditions, the technical outlook remains bullish.
Key Technical Signals:
- Support Holds: The 2350 support level successfully contained the recent bearish pullback.
- Upward Rebound: The 4-hour chart reveals an initial upward rebound, bolstered by the positive influence of the 50-day simple moving average.
- Breached Resistance: The former resistance at 2340, representing the 23.60% Fibonacci retracement, has been transformed into support, reinforcing the bullish bias.
Upward Potential:
As long as trading remains stable above 2340, the upward trend is likely to continue. A consolidation above 2380 would further strengthen this bias, paving the way for potential targets of 2384 and 2397, with the possibility of reaching 2400.
Downside Risks:
A failure to hold above 2340, followed by consolidation below this level, could invalidate the bullish scenario. This could trigger a downward correction, initially targeting 2335. A break below 2329 would signal a more significant correction, potentially reaching 2318.
Caution:
- High-Impact Economic Data: Today’s testimony by Fed Chairman Jerome Powell could introduce substantial volatility into the market.
- Geopolitical Tensions: Ongoing geopolitical tensions further contribute to the risk of heightened price fluctuations.
Overall Assessment:
Despite the recent pullback and consolidation, the technical outlook for gold remains bullish. Key support levels are holding, and an upward rebound is underway. However, traders should exercise caution due to the potential for volatility stemming from both economic data releases and geopolitical events. A consolidation above 2380 would reaffirm the upward trend, while a failure to hold above 2340 could trigger a downward correction.
Disclaimer: Trading in CFDs involves risks, and all scenarios are possible. This analysis is not investment advice but rather an interpretation of the current technical landscape for gold.
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