Gold Price Analysis: Extends two-day gain, 15-min chart shows inverse H&S breakout

Gold's intraday chart shows scope for a stronger corrective rally.
Macro factors, however, are aligned in favor of the bears.

Omkar Godbole FXStreet Contributor

Gold is trading near $1,730 per ounce, having risen from $1,680 to $1,720 in the previous two trading days.

The metal's 15-minute chart shows an inverse head-and-shoulders breakout, a bullish reversal pattern. The breakout has opened the doors for a rally to $1,764 – the target as per the measured move method.

The bullish bias would be invalidated if prices drop below the former hurdle-turned-support of the inverse H&S pattern.

President Joe Biden's $1.9 trillion stimulus plan approved by Congress on Wednesday is expected to power the US economy to its strongest economic growth rate in 40 years. Further, it could amplify inflation concerns, strengthening the case for an early tightening by the Federal Reserve (Fed).

If that happens, the yellow metal will likely face selling pressure. Gold has declined by nearly 9% this year with markets bringing forward the timing of the first Fed rate hike to December 2022 from 2024 in the wake of rising inflation expectations.

15-minute chart

Trend: bullish

Technical levels

BTC/USD

Overview
Today last price	55959.93
Today Daily Change	84.79
Today Daily Change %	0.15
Today daily open	55875.14

Trends
Daily SMA20	50785.67
Daily SMA50	44000.55
Daily SMA100	35650
Daily SMA200	24286.37

Levels
Previous Daily High	57396.76
Previous Daily Low	53032.7
Previous Weekly High	52646.22
Previous Weekly Low	43065.14
Previous Monthly High	58355.76
Previous Monthly Low	32336.85
Daily Fibonacci 38.2%	55729.69
Daily Fibonacci 61.8%	54699.77
Daily Pivot Point S1	53472.98
Daily Pivot Point S2	51070.81
Daily Pivot Point S3	49108.91
Daily Pivot Point R1	57837.04
Daily Pivot Point R2	59798.93
Daily Pivot Point R3	62201.1

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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