Gold Price Forecast – Building a Base, Another Run Could Be Nearing

Gold Technical Outlook:

  • Gold wedging after recent bull-flag break
  • 2011/12 levels remain the big hurdle to overcome

For an intermediate-term fundamental and technical viewpoint, see the Gold Price Forecast.

Gold wedging after recent bull-flag break

It’s been two months to the day since gold topped out, when optimism reached euphoric levels and the 2011/12 resistance zone from around 1522 up to 1575 became a strong ceiling. The past two months has generally highlighted a bullish digestion phase, with sell-offs quickly met by buying.

The overlapping price action formed a bull-flag that gold limped out of on October 24, an unconvincing break it was though. But now with price firmly outside the pattern and gold grinding towards the apex of a wedge, a firmer attempt to run through long-term resistance could be nearing.

A push from here is going to be presented with immediate challenges as the zone from the bottom of the 2011/12 topping process is dead ahead. That is why the two-month long congestion phase has been important for gold, it needed the rest to garner strength for a push that could take it through from neutral conditions, not the overbought conditions present in September.

On the flip-side, gold might not try and make a resolute bullish breakout, instead break the wedge to the downside and lead to a longer consolidation period. A break of the underside trend-line will have this scenario in play, with the 1450 area could quickly coming into view.

Check out the IG Client Sentiment page to see how changes in trader positioning can help signal the next price move in gold and other major markets and currencies.

Gold Price Weekly Chart (2011/12 levels stand in the way)

Gold Price Daily Chart (wedging after bull-flag breakout)

Gold Price Forecast - Building a Base, Another Run Could Be Nearing

Gold Price Charts by TradingView

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—Written by Paul Robinson, Market Analyst

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