Gold prices continued to climb on Friday, hitting a new record high of $2,721. As of this writing, buyers remain dominant, with the precious metal trading close to its peak for the day. The bullish momentum observed today indicates an improvement compared to the previous three days, following the initial breakout from a bull flag trend continuation pattern. Notably, the trading range today is wider than that of the last three days. A strong close today, both daily and weekly, would position gold well for potential higher targets.

First Target: $2,724

The first target zone is set at $2,724, marking the initial target for a rising ABCD pattern, as illustrated in purple on the chart. This level is likely to encounter resistance, which could lead to a pullback. If this target is surpassed, the next level to watch is $2,754. Achieving this price would complete a 250% extended retracement of the bearish correction that began from the March 2022 peak. Additionally, keep an eye on the upper parallel channel rising trendline, as it may provide further insights as these price levels are approached.

Bull Flag Points to $2,815

A higher potential target of $2,815 is derived from the measuring objective of the bull flag. The breakout of the flag followed a successful test of support at the 20-Day moving average earlier in the session, serving as a launching point. There is also an earlier target slightly below this, at $2,797, which would complete a 200% retracement of the bearish correction that started from the 2011 peak of $1,921.

Key Support Level at $2,686

On the downside, a drop below today’s low of $2,692 would indicate short-term weakness and could lead to a more significant pullback. The breakout to new highs occurred above $2,686, making it a critical level to watch for support. If this decline happens before new highs are established, a deeper pullback seems likely, especially given that today marks only the first bullish follow-through day. The 20-Day moving average will be crucial; since reclaiming it on August 8, it has effectively served as a support area for the trend. If it fails to hold, that would be a warning sign for traders.