Gold has shown signs of slowing momentum after reaching a record high of $3,058, with Thursday’s trading session highlighting some caution. While the precious metal established a new daily high and low, maintaining the daily uptrend structure, it is at risk of ending the day in the red, below its opening price of $3,058 and potentially closing lower than Wednesday’s price of $3,023.
Pattern of Rising Closing Prices
Since the rally began following a pullback to $2,880 (now considered an interim swing low), gold has consistently closed higher than the previous day’s price, with one exception. This pattern could shift if Thursday’s session closes below Wednesday’s price, breaking the trend of higher lows. However, the prevailing trend of higher daily highs remains intact for now.
Parallel Channels and Resistance Zones
Two rising parallel trend channels are highlighted in the analysis, providing a framework for potential resistance. The larger channel’s top line is now lower, indicating that gold may approach this resistance next. A small confluence zone around $3,080 marks the next potential resistance area. If gold reaches this zone, it will be a key point to watch for potential reversal signs. The lower parallel channel line adds further significance to the resistance zone, as it intersects with the current price action.
Near-Term Support at $3,026
In the near term, the key support level is $3,026. A drop below this level could signal short-term weakness in gold’s price movement. However, what follows such a decline is crucial—whether gold continues its downward trend or experiences a quick recovery and rises again. The price channels will help identify areas of oversold or overbought conditions. The Relative Strength Index (RSI) is currently in overbought territory, signaling that a potential pullback could be on the horizon as the top channel line is approached.
Likely Bullish Weekly Pattern
With one more trading day remaining in the week, gold appears on track to end the week in the top quarter of its trading range. If this occurs, it would confirm strong bullish momentum on a larger time frame, increasing the likelihood of reaching higher target zones next week. This would signal that, despite the current slowing of momentum, the overall trend remains upward, and gold may continue its bullish trajectory in the near future.
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