When the gold bulls will start to take profits?
|The end of December and the beginning of 2017 is definitely the time for Gold buyers. The price of this precious metal is advancing higher and is making nice bullish candles (most recently – five in a row). Price reached very important resistance (yellow area) located slightly above 1200 USD/oz. We also do have here a 38,2% Fibonacci retracement of the latest downswing. It is potentially a good place for a reversal? Well, yes but if we look above we can find a better one.
With the red coloured rectangle we highlighted a nice place for a potentially strong resistance. This place is created by the 38,2% Fibonacci retracement of the main downtrend along with the potential correction equality movement (orange areas). If the price do not want to stop now (because we do have higher highs and higher lows almost every day) maybe they will use this second resistance located a bit higher? Yes, we say 'maybe' because the recent upswing is really strong and to be honest with you, we are bullish on Gold in the long-term. In our opinion, 2017 will be positive for this precious metal and we will end this year much higher. That is why, we consider those local resistances as only temporary and we strongly believe that most of them will be broken soon.
We do not anticipate that those levels mentioned above will resist for a long time. They can be local triggers for take profit actions but sooner or later the demand for gold will increase, which will help to pull the price higher. Breaking the green 38,2% Fibonacci will be the first sign of bullish reversal as it will create an overbalance situation and will confirm the breakout of the horizontal resistance labelled with yellow colour.
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