- Summary:
- Gold price formed a double bottom pattern and aims a move back to the $1,800 level. The market remains well bid and now struggles at horizontal resistance.
The price of gold trades with a bullish tone as it bounced back from a double bottom pattern. The projected measured move suggests a target of $1,800 once the price clears the horizontal resistance given by the neckline.
Gold declined ever since it made a new all-time high in the summer of 2020. By the time the bearish trend formed lower lows and lower highs, bulls were caught by surprise. In the meantime, Bitcoin kept making new higher highs, as investors switched from the classic alternative investments to the digital ones.
Moving forward, investors should be aware of the fact that the price of gold leads other markets. The decline in the price of gold led to a decline in the EUR/USD, for instance, although the main currency pair on the FX dashboard did not drop together with gold. As such, the potential reversal pattern on the gold market may bode well for other currencies against the dollar and fuel the reflation theme.
Gold Price Technical Analysis
Bulls may want to wait for the price to break and close above the neckline before going long. The stop loss for the long trade must be set at the lowest point in the pattern and traders may want to book half of the profits once the measured move is reached and keep the rest for a better risk-reward ratio.
Gold Price Forecast
