Gold Price Forecast: Bullish Reversal and Potential Breakout
On July 12, 2025, gold prices experienced a significant bullish reversal, breaking through key resistance levels and reaching a daily high of $3,369. This marked a 13-day high and indicated a strong upward momentum following a rally above the 50-Day Moving Average (MA) and a short downtrend line. The convergence of the 50-Day MA with the downtrend line at the time of the breakout further confirmed the bullish sentiment.
Key Developments
- Gold's advance above $3,366, an interim swing high, is a positive sign of strength.
- The price remains near the day's highs, suggesting a bullish closing position.
- Gold is on track to test resistance near the upper boundary of a developing bull pennant pattern.
Future Projections
If gold successfully breaks above the upper boundary of the pennant, it could target an initial high around $3,578, based on a rising ABCD pattern that began from a mid-May swing low. A further extended target is set at $3,603, derived from the 127.2% extension of the April downswing.
Market Behavior and Support Levels
The apex of the pennant triangle is approaching, indicating that a breakout could occur within the next couple of weeks. A failure of the bullish pennant would be indicated by a drop below the lower boundary of the pattern. The recent breakout of silver to a new trend high supports the potential for gold to follow suit.
Monitoring gold's behavior around support levels, particularly the 20-Day and 50-Day MAs, will provide further insights. A bullish scenario would see support maintained above the recent low of $3,322, aligning with the 50-Day MA. However, the market remains in a consolidation phase, suggesting that price action may remain choppy until a decisive breakout occurs.
Conclusion
Overall, the outlook for gold remains positive, with the potential for further gains if the bullish momentum continues. Traders should keep an eye on key support levels and market behavior in the coming weeks to gauge the likelihood of a breakout.