In today’s technical analysis, let’s focus on gold, which is currently climbing significantly higher, supported by a strong technical foundation.
On the chart, we can observe a larger flag pattern, outlined by blue trendlines. This flag serves as a classic bearish correction within a broader bullish trend. Importantly, the correction appears to be coming to an end. Recently, gold bounced off the lower boundary of this flag formation. What makes this bounce even more compelling is that it formed an inverse head and shoulders pattern — a textbook bullish reversal setup — clearly visible and marked with yellow rectangles.
The neckline of this inverse head and shoulders pattern was broken recently (marked in black), which triggered a technical buy signal. This breakout has provided the fuel for the latest rally in gold prices, helping confirm a shift in short-term momentum.
Looking ahead, the next major technical target is the upper boundary of the blue flag. Given the strength of the breakout and the bullish structure in place, the probability of gold reaching this resistance is high.
Sentiment on gold is clearly positive. As long as the price remains above the neckline and continues within the bullish structure, the bias remains upward.