I have made a few posts now about Gold Consolidating after it had hit a high of $3500 USD back in April. Originally I thought a 3-6 month consolidation would be ideal, but as the price action has developed I became convinced that I was seeing a Bullish Flag Continuation Pattern. My last post was alerting readers to the fact that Gold Threatens Resistance levels just 11 days ago and while resistance held at that level then, it has since gone through. This signals to me a potential breakout and a likely move higher...
Source
The above chart is a 4 Hourly of the Spot Gold price and you can see quite clearly the channel that Gold has been consolidating in. The Support line has 4 touchpoints and the Resistance had 3 before it finally went through yesterday. It is always good to get confirmation of identified patterns even if they are on a shorter timeframe and this does personally make me fairly bullish on Gold, but that doesn't mean this is not a false signal so it is wise to still be cautious.
For now I am looking at the former Resistance of that channel as a potential line of new Support and so now I want to see Gold staying above that line. I do expect it to start grinding higher and it will be interesting to see if there is more resistance at the previous All-Time-High of $3500 USD or whether it will just blow through that level with momentum. The next major target for Gold after that would be $4000 USD and I would not be surprised to see Gold moving up to that level over the remaining months of 2025.
From a more Fundamental Analysis perspective there is not a lot going on with Monetary Policy developments, but we HAVE seen some serious escalation of the Ukraine / Russian war which would be a concern for many people. Ukraine launched a massive drone attack deep inside Russia and then followed that up with a strike on the Crimean Bridge in the last 24 hours. There has been a lot of talk about peace negotiations in recent months, but the reality on the ground is that it doesn't look like peace is any closer and I'd question whether key global players even want peace.
This recent escalation might be the push that has led to Gold breaking through it's consolidation channel. The situation is certainly quite volatile right now and Gold is a Safe Haven asset that usually gets bid up when there is geopolitical uncertainty.