Momentum Builds Toward Confluence Targets
The next obvious upside target is around $4,897 to $4,901, derived from the 50-day moving average and 61.8% Fibonacci retracement, respectively. Monday’s pullback was followed by clear bullish momentum, completing the first pullback following the breakout above the confluence price zone. The completion of that dynamic and the subsequent signs of strength is bullish behavior, reinforcing the idea that momentum is reasserting itself after consolidation. Therefore, the reaction of gold near the 50-day moving average will be key to what might come next.
50-Day Moving Average Transition Zone
From August until mid-March, the 50-day moving average had defined dynamic support for the immediate uptrend. It broke with a decline on March 18, and the current advance represents the first pullback to test that prior significance trend support indicator as resistance. Resistance seems likely to be seen on the first approach, similar to what occurred with the 20-day moving average. Once touched, gold consolidated for five days near the resistance zone before reclaiming it last Wednesday.
Higher Fibonacci Levels in Focus
If the $4,901 high can be recovered, there is a chance that the 78.6% Fibonacci retracement level at $5,122 could be tested as resistance. Regardless, short-term weakness should find support above the 20-day moving average at a minimum, to show continuing underlying strength and preserve the broader bullish structure that began with the March low.
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