Gold poised to continue run

<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.

 

Gold technical chart 10.03.14

 

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.

 

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