Gold: Intraday weakness as a chance to buy [Video]
|Gold
A huge positive candlestick has put the bulls in control of gold once more. The positive candles have been building in recent sessions, but the reaction to an early gap lower on Monday morning was for the market to buy consistently throughout yesterday’s session. Technically, the outlook is strong once more, with the decisive close clear of the resistance at $1642 which also means clearing the 23.6% Fibonacci retracement (of $1445/$1702) at $1642. Momentum indicators are decisively positive now, with RSI confirming the breakout and above 60 whilst MACD lines are accelerating above neutral and Stochastics bullishly configured. After such a strong candle (which added $45 on a close to close basis and $65 from the day low) there can be a tendency for at least an intraday pullback, which could be seen today. However, we look to use intraday weakness as a chance to buy, with the breakout at $1642 as a key support area now. There is an uptrend of the past two weeks rising at $1604 today as a gauge for the near term outlook, but the bulls will certainly now be eyeing the multi-year high of $1702 again. Initial resistance is the overnight high of $1671.
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