Gold Prices Consolidate Ahead of the Markets Next Breakout
Market Condition: Gold Prices Consolidate Ahead of Breakout
Target 1: 1X Range Bullish $1,289.44 Bearish $1,217.20
Target 2: 2x Range Bullish $1,313.51 Bearish $1,193.13
Invalidation: Gold Prices Continue to Consolidate
Gold Price Daily Chart
(Created using Tradingview Charts)
Gold prices continue to consolidate after the commodity printed a new October low last Friday at a price of $1,241.27. If daily Gold prices close at present levels, this would be the second consecutive day of prices trading inside of Friday’s daily bar. This suggests that the October 7th low may be seen as a value of support, and the high of $1,265.34 may act as a current value of resistance. Knowing this, traders may plan for Golds next daily breakout. Traders may extrapolate 1X of the range ($24.07) to find bullish breakout targets near $1289.44, and bearish targets near $1,217.20.
In the event of a false breakout, traders may consider using half the distance of the range to create an initial 1:2 Risk/Reward ratio. Traders should also remember that it is possible for Gold prices to continue trading in a consolidating pattern. In this scenario, traders may elect to leave pending entry orders, or trade the developing range in prices.
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