Gold rises above major moving average

<p>Gold (daily chart shown below) has risen above its 200-day moving average for the first time in a full year. Not since February 2013 has […]</p>

Gold (daily chart shown below) has risen above its 200-day moving average for the first time in a full year. Not since February 2013 has gold traded above this major moving average.

The daily price close above the average occurred on Thursday, with Friday, showing further marked strength for the precious metal.

This bullish move occurs within the context of a longstanding bearish trend, still currently intact, which extends back to the October 2012 high near 1800.


Gold TA chart 14.02.14


From the double-bottom low of 1178 at the very end of 2013, the current advance represents a full upside correction of around 12% so far.

Having broken out above both the 200-day moving average as well as the 61.8% Fibonacci retracement of the last major decline, gold’s bullish momentum has just reached an intermediate resistance level around 1320.

Any further upside extension of this bullish correction should find dynamic resistance around a key downtrend resistance line extending back to the noted October 2012 high near 1800.

A breakout above that trend line would create the potential for a break of the long-term downtrend, with further major resistance around the 1425 level.

The key downside support level to watch continues to reside around the 1265 price area.


Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

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.

For further details see our full non-independent research disclaimer and quarterly summary.