Gold: Will this move higher be the upside break we have been waiting for?

Richard Perry Independent Analyst

Gold

After several days of indecision and the market lacking conviction, on Friday the gold bulls found a big session to drive the market higher. The result has been an upside break through resistance at $1744 this morning. The first issue is now whether this is a move to be trusted. There needs to be a close above $1744 , and ideally with conviction clear of the resistance. Initial gains may have been pared slightly, but so far the move is holding. Momentum currently looks to be improving on the daily chart, with RSI above 60, whilst MACD and Stochastics also tick higher. However, these upside moves on gold into the $1744/$1764 range on gold have struggled for months, and we would need to see conviction before getting excited that this may be the upside break we have been waiting for. Ideally, the $1744 breakout now needs to become a basis of support, with the hourly chart showing $1736/$1744 now as a support zone. The hourly chart also shows a uptrend that can be derived over the past two weeks, coming in around $1726 this morning. We have been looking for an eventual upside break above $1764, however, given the number of false signals on gold over recent weeks, we remain cautious for now.

Author

Richard Perry

Independent Analyst

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