Gold’s Rising Flag Pattern and Support Levels to Watch

Gold is still holding above the level of support from last Wednesday at 1,969, but it hasn't shown any new indications that it may go higher. The subsequent sign of strength would be a daily closing above Wednesday's high of 2,008. That seems to be what it may do today. For the previous month, gold has been climbing in a parallel trend channel or ascending flag pattern. Gold would aim for the top trendline of the flag if prices rose further from the bottom of the week.

It's a Bullish Hammer Pattern. made on Wednesday

Gold completed a bullish hammer candlestick pattern on Wednesday. This offers some further proof that the bottom of yesterday could have marked the end of the recent retreat. On the graph, you can see how Wednesday's low immediately rebounded off the flag's lower trendline. That is the third point on the line, giving it a little more significance than it would have had there just been two lows.

negative signs Below

Alternately, a decline below this week's low of 1,969 would signal a failure of the rising flag and probably result in a further retracement. A rising flag resembles a bearish ascending wedge in appearance. In each instance, when the price consolidates, it increases overall. During this process, momentum dwindles, and finally, as buyers lose interest, selling becomes more intense.

However, there are a few support levels close to the bottom that need to be kept an eye on as well. Yesterday, the 34-EMA, which is at 1,966, was used effectively as support and held. Therefore, it may be revealing again in the future. The pricing range after that is about between 1,960 and 1,957. The previous swing high resistance and a few Fibonacci support levels make up that range. A sinking trendline and a bearish RSI divergence are also visible.

Expected to Continue in Intermediate Uptrend for Gold

The good news for bulls is that if a retracement does happen, it may not be too severe. Gold seems to be able to find support either before or at the uptrend line. Use the Fibonacci numbers as a guidance as well. The pattern's first point, which is at 1,934, would be the traditional objective from the breakdown of a rising flag.