Gold takes aim at key resistance as the weekend approaches

August 16, 2024 at 11:27AM
There is a bit of a flag pattern forming in gold as price action continues to sit near fresh record highs this week. There was an attempt to breach the key resistance region around $2,475-80 on Wednesday but buyers cooled off after. And after a slight setback, they are quickly turning things around again as we get closer to the weekend now.

As the Fed looks to cut and yields are weighed lower, the simple case is for a bullish argument for gold. That being said, the technicals are another thing. There has been almost no semblance of a pullback since the surging run higher in March this year.

Sure, there was a bit of a consolidation from mid-April to end-June. However, it’s not exactly a retracement of any sort. For some context, gold rose by a little over 13% over the course of 2023. Meanwhile, it is up nearly 20% already in just 2024 currently.

There are reasons to stay bullish in gold in the long-term and also some reasons to expect a pullback from a technical perspective.

But perhaps price action and price patterns make for the simplest argument for gold at the moment.

And that is to go with the break of the flag pattern above. That is either on a topside run above $2,475-80 or a push back lower below $2,400 to threaten the 100-day moving average (red line) near $2,362 currently.

This article was written by Justin Low at www.forexlive.com.