Last few weeks of trading on Gold were not very interesting. This precious metal, for most of the time, was locked inside the sideways trend between the resistance on the 1288 USD/oz (orange) and the support on the 1266 USD/oz (green). That range was limiting the price movements since the middle of October but it seems that times of the lower volatility ended and we have a come back to the bullish trend here.
Our positive approach to the XAUUSD is based on the technical factors. First of all, on Friday, the price broke the horizontal resistance around the 1288 USD/oz (orange), which was a respected since the 18th of October. What is more, we already tested that level from the top and used that as a closest support. We all know that one of the most important principles of the Price action trading is that the broken resistance becomes a support. That is exactly what we are having here now. In addition to this, at the beginning of November, the price broke the black line connecting recent lower highs and limiting the bearish correction, which started on the 8th of September. Technically, that ended the mid-term down trend.
As long as the price will stay above the orange area, we will have the positive sentiment here. Comeback below this level will trigger the 'false breakout' scenario and that usually means a strong downswing but chances for that are rather limited.
