Gold poised to continue run
James Chen March 10, 2014 6:57 PM
<p>Gold (daily chart shown below) has consolidated its gains after having risen to establish a four-month high around 1355 last week. That high was a […]</p>
Gold (daily chart shown below) has consolidated its gains after having risen to establish a four-month high around 1355 last week.
That high was a tentative culmination of a two-month bullish trend that launched the precious metal off its long-term low of 1178, which was hit at the very end of 2013 and which formed a major double-bottom pattern.
In the process of the recent bullish run, gold has advanced above several key resistance levels, including 1265 and 1320.
Mid-February saw a rally well above the 200-day moving average; a situation that has not occurred since a year earlier in February of 2013.
Additionally, the 50-day moving average is now closely approaching the 200-day, which could lead the way to a rarely seen bullish cross.
Last week’s noted high of 1355 placed the price of gold above the major downtrend resistance line that has defined the bearish trend since the 1800-area high in October of 2012.
Technical considerations indicate further potential upside momentum on that breakout.
While currently consolidating its gains, a resumption of the recent run could target a key upside resistance level around 1425, last hit in August, which represents the peak of the noted double-bottom pattern.
StoneX Financial Ltd (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.