In today’s technical analysis, let’s focus on gold, which continues to show impressive volatility and remains one of the most closely watched instruments on the market. After a sharp decline in October, gold reversed the trend at the turn of the month, forming a pennant pattern — or, more broadly, a symmetric triangle — near the bottom of the chart. Interestingly, this formation led to an upside breakout, defying the usual continuation nature of a pennant and marking a shift from bearish to bullish sentiment.
The most dynamic part of the reversal occurred on Monday, when gold surged sharply higher, reclaiming key resistance levels. Following that, the market entered a short-term correction phase, shaping yet another, smaller pennant formation on the chart. This secondary pattern is now defining the next directional move, and traders are waiting for a breakout confirmation.
If gold breaks to the upside, that would confirm a continuation of the bullish reversal, with the first target located nearby — the highs from October 22nd and 23rd. The chances of reaching this level are relatively high, given the momentum we’ve seen in recent days. On the other hand, if the price breaks below the lower line of this smaller pennant, it would invalidate the short-term bullish setup and act as an invitation to go short, suggesting a deeper pullback within the broader recovery.
Gold remains at a technical crossroads, and whichever direction this breakout takes will likely define the near-term outlook for the precious metal.