Gold futures may add to their recent gains in the week ahead, with favorable technical indicators underpinning the rally. Autochartist identified a breakout on the 30-minute chart which carries an upward bias from the current price. The projection is consistent with the overall trend higher after overcoming short term resist.Last week’s rising price action propelled gold out of a well-defined Triangle chart pattern, generating an Autochartist forecast target which has not yet been achieved. The pattern scores high across all of the internal readings, with solid Clarity and Initial Trend readings giving it an overall Quality ranking of 7 bars. Lacking in the momentum department however, the follow-through of the initial move has been noticeably weak. The initial breach of the top of resistance was met with modest selling pressure that caused a minor retracement back below the breakout point.
A resurgence of buying interest this week would confirm the rally and imply a move to the projected price range of $1,754 to $1,764 per ounce. If reached, a new trading range may develop at those levels. Failure for the market to push higher from Friday’s settlement would place the price back inside the Triangle chart pattern. This could result in one more test of support near $1,740 per ounce as the pattern continues to develop in a broader range.
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