Gold's bullish dance and the rally beyond the flag
|Today's spotlight falls squarely on gold, the venerable metal whose recent performance is nothing short of bullish. In the past few days, gold has been flashing its age-old luster, climbing the charts with renewed vigor. The significant development here is yesterday's definitive buy signal on this precious metal.
Tracing back to May, we notice that after striking a local peak, gold embarked on a corrective phase. This correction manifested as a flag formation, delineated by two parallel black lines. Importantly, the flag stretched down to touch the 38.2 Fibonacci level, painted in a noticeable shade of orange on our charts. This Fibonacci level has since held its ground as a bastion for gold, rebuffing four distinct attempts by the price to breach it. The most notable defense of this level came on the 14th of September when the price rebounded, leaving behind a hammer candlestick in its wake.
This rejection from the Fibonacci level sparked an upswing, a rally strong enough to shatter the upper confines of the flag. Technically, this breach spells the termination of the bearish correction and heralds the onset of a bullish phase. As traders, our eyes now dart to the 23.6 Fibonacci level, which stands as the immediate target. Beyond that, the symbolic $2,000 mark beckons, and further along the horizon, we find the green zone - echoing the highs from early May.
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