Is gold preparing for a new high?
With the candle of 30th May, gold has reached the upper edge of the small sideways range in which it has been trading since 23rd April. The market tried to break through this range on 13th May, but quickly fell back and even touched the lower edge to make another attempt to break out downwards.
The current breakout was driven by strong momentum. The market rose steeply. With only one candle, gold reached the US$1300 mark and passed it with ease. Then, with another candle, it reached the US$1325 level, and there the market has currently paused. With yesterday’s candle, the market tried to attack the 20th February highs, but could not overcome them by late trading.
The zone at US$1336 could be crucial for the market’s further progress. If the market overcomes this zone, a new annual high in the region of US$1358 could serve as the first significant resistance. If the market also overcomes this area, there could be further structural resistance around US$1381 and US$1408.
However, if the US$1336 zone proves too strong for the bulls and the market falls back, the upward trend line could be the first support for the market. The structural area at US$1310 could provide further support. Further structural support may be available in the US$1292, US$1274, US$1252 and US$1231 regions.
However, if the market falls below the US$1266 area, caution is advised as a breach below this level marks a deeper low, which could be interpreted as a sign that the current upward trend may reverse.
The MACD oscillator is in positive territory. The histogram reflects the price movement.
GOLD Daily Chart | Source: ActivTrader
Written by Daniel Schuetz, External Analyst, ActivTrades
*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided.