Gold advances further from lows
James Chen February 11, 2014 8:52 PM
<p>Gold (daily chart) has furthered its general advance of the past six weeks after having established a double-bottoming pattern around the 1180 support level towards […]</p>
Gold (daily chart) has furthered its general advance of the past six weeks after having established a double-bottoming pattern around the 1180 support level towards the very end of 2013. That low was a re-test of the June 2013 low at 1180.
Since the beginning of 2014, gold has risen steadily above several key resistance levels, suggesting that the precious metal may tentatively be in the midst of bottoming out.
Since rising above its 50-day moving average in mid-January, the price of gold has gone on to breakout recently above both the key 1265 resistance area as well as a major downtrend line extending back to the August high at 1433.
Currently, the price has risen even further to touch both its 200-day moving average as well as the key 61.8% Fibonacci retracement of the last major price decline.
With this confluence of resistance directly above, gold is at a critical technical juncture.
A breakout above this resistance would extend the bullish momentum, potentially targeting further key resistance around the 1320 level and then the long-term downtrend line extending back to the 1800-area high of October 2012.
Short-term downside support currently resides around the noted 1265 support/resistance area.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.