Potential Resistance at Record High
There is the potential to strike strong resistance as the current record high of $4,381 is challenged. Today’s intraday pullback is a good example of that. Given the lack of upside follow through and weak momentum, a pullback to test resistance near the 10-day average at $4,268 currently could occur before another new high attempt. That average is supported by an uptrend line and two top trend channel lines as they each currently identify a similar potential area of support. It might be what the market needs before buyers step in more aggressively than recent technical evidence suggests.
10-Day Support Expectations
The most recent pullback to the 10-day line shows several days where trading occurred slightly below the line before recovering. Therefore, another pullback to the 10-day line should see signs of clear support either above the line or at it but not below it.
Upside Targets on Breakout
Following a sustained new record high breakout, gold first heads toward a 127.2% measured move projection at $4,454. That target is followed by a more significant 127.2% extension of the October correction at $4,516. In addition, gold broke out of a symmetrical triangle formation on November 28. The measuring objective from the pattern points to a potential target of approximately $4,619.
Channel Breakout Dynamics
Since gold has been advancing at a more rapid pace since late-August, it broke through the top of two rising trend channels in October, which failed. Subsequently, it is once again in the process of channel breakouts. This shows momentum increasing and it could lead to a sharp advance if a new record high is established. But it will also put gold in a potentially overextended position making it more prone to sharp corrections or a bearish reversal.
Outlook
Gold’s brief push to $4,375 lacked conviction and met immediate selling, keeping momentum muted and a deeper test of the 10-day/channel/uptrend confluence near $4,268 probable. Hold there and clear $4,353–$4,381 to resume toward $4,454–$4,516; failure to defend the 10-day raises risk of sharper profit-taking while the larger bull trend stays intact.
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