We all know that gold had a massive 10-year run higher, culminating in a top over $1900 per ounce in 2011. Since then it has been on a 5-year ride lower. Those who lauded its benefits on the way up seem to have missed the last 5-year trend, convinced that it will turn around. Well that day may be here.
But with just one day left in April, the shiny rock is poised to break out of a downward channel to the upside. Unless it falls back under $1200 today it will confirm this break out, which is unlikely. Goldbugs will tout this as a definitive reversal and it may be just that.
I suggest you look at it as a positive event in a series that has to happen to strengthen the argument. The next move would be over 1300, and then over the top of the falling channel at 1400. Ideally we'd also see the momentum indicators move into the bullish zone, which would happen with the RSI over 60 and the MACD moving over zero. Then a move over the prior support area at 1560 would be icing on the cake.
Until this happens, gold's action may be just a bear-market rally. While it could be profitable, it's not yet a long-term trend reversal. Keep your stops close.