Gold technical analysis: Bull flag pattern pointing to 1,880?
The release of the November FOMC minutes, which were more dovish than anticipated since a large majority of Fed officials judged that a decrease in the pace of the fed funds rate increase would likely be appropriate soon, sent 
gold prices surging beyond $1,750/oz once again.
The early stages of the formation of a bull flag pattern can be seen on the gold 4-hour chart. This pattern may be read as the continuation of the November price action and may provide an entry point for a near-term rally extension.
A bull flag pattern is defined by a pole where prices surge first, followed by a horizontal or downward-sloping flag of consolidation, and then a large increase in the upward direction equivalent to the size of the initial pole.
In the case of gold, the first pole begun with the triple bottom that occurred in early November at $1,616/oz, followed by a two-week rebound to the $1,788/oz resistance, where sellers reemerged as prices hit the 38.2% Fibonacci level of the 2022 high-low range.
Gold prices then formed a downward-sloping flag and consolidated in a descending channel until November 23, when the flag channel was breached.
With the second pole already starting to take shape, the technical picture may portray a rise to $1,880/oz if the second pole matches the scale of the first pole.
The relative strength index (RSI) rebounded from very oversold levels, while the moving average convergence/divergence (MACD) indicator completed a bullish crossover below the zero line. These were also positive development.
If this price extension to $1,880/oz materialises, it will signal a significant development for the gold uptrend since the 50% Fibonacci level will be surpassed.
gold prices surging beyond $1,750/oz once again.The early stages of the formation of a bull flag pattern can be seen on the gold 4-hour chart. This pattern may be read as the continuation of the November price action and may provide an entry point for a near-term rally extension.
A bull flag pattern is defined by a pole where prices surge first, followed by a horizontal or downward-sloping flag of consolidation, and then a large increase in the upward direction equivalent to the size of the initial pole.
In the case of gold, the first pole begun with the triple bottom that occurred in early November at $1,616/oz, followed by a two-week rebound to the $1,788/oz resistance, where sellers reemerged as prices hit the 38.2% Fibonacci level of the 2022 high-low range.
Gold prices then formed a downward-sloping flag and consolidated in a descending channel until November 23, when the flag channel was breached.
With the second pole already starting to take shape, the technical picture may portray a rise to $1,880/oz if the second pole matches the scale of the first pole.
The relative strength index (RSI) rebounded from very oversold levels, while the moving average convergence/divergence (MACD) indicator completed a bullish crossover below the zero line. These were also positive development.
If this price extension to $1,880/oz materialises, it will signal a significant development for the gold uptrend since the 50% Fibonacci level will be surpassed.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.