Gold signaling a possible end to a long lasting sideways trend
|Gold is slowly waking up from its winter hibernation. Yesterday’s session may not have been a game changer but we definitely saw an uptick in gold’s volatility and momentum. That’s a first step towards a more significant movement hopefully in the near future.
What changes do yesterday’s upswing bring?
First of all, the price confirmed the bounce off the mid-term up trendline (red) connecting higher lows since the middle of December. We also made new yearly highs, and to top it off the price managed to break the horizontal resistance on the 1830 USD/oz. With all that, I’m guessing gold bulls are at least a little bit satisfied.
What stays the same?
The price is still inside of the long-term symmetric triangle pattern (blue). As long as we stay inside, there is no legitimate, long-term trading signal. For this, we would have to see the breakout of the upper line of this formation first. The thing is we can easily go to this line and bounce, which will bring us back to the boring, exhausting sideways trend.
I think that recent movements on gold disappointed everybody, even traders who aren’t interested in the asset. Yesterday, the light in the tunnel appeared bringing us a little hope to finally introduce some action to this precious metal. Staying above the 1830 USD/oz support should definitely help.
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