World gold prices continued to increase, reaching a record of 2,955 USD/ounce in the trading session on the afternoon of February 20, but the increase rate gradually slowed down, then decreased to 2,944.4 USD/ounce.
Previously, the trading session on February 19 also recorded similar fluctuations, as gold moved in a narrow range from $2,924 to $2,955 and ended the day in a state of decline.
According to FXempire, gold's momentum has decreased for 2 consecutive days. Although the upward trend is still maintained, the closing price has not been able to cross the upper boundary of the pennant model. Pennant is a technical model of two convergence lines, formed after a strong trend, often signaling the continuation of the previous trend if prices break out in the old direction.
Currently, gold is trading in a weak support zone, in the bottom third of the day's range.
Although there are signs of a breakthrough from the pennant model, weak buying power has prevented prices from confirming the uptrend, increasing the risk of a downward turn.
If the bottom is broken, gold prices could plummet to the bottom of the model. The next important short-term support level is at $2,919 - the bottom on February 20. If prices continue to break through the $2,892 mark (the lowest level on February 18), the risk of gold prices falling further will increase.
The decline in gold prices below $2,892 could be a warning sign that the flag model has failed, leading to stronger selling pressure. If this happens, key support zones including $2,864 and the 20-day moving average (Day MA) at $2,854 will become an important fulcrum.
Notably, 20-Day MA Street has not been re- inspected since January 7. This increases the likelihood that gold will return to test this support level in a deeper correction. Further, the 2,790 - the previous trend peak - could also play an important support role.
However, on the other hand, if gold recovers, the next target will be $2,961, followed by a potential resistance level of $2,982 and an important milestone of $3,012.
With only one remaining trading session of the week, the closing price of gold will be very important, helping to determine the potential trend for next week. The next developments in gold prices are facing many options, either maintaining the upward momentum or showing the first signs of a deeper correction.
