Gold (daily chart) established a new four-month high at 1350 early on Monday, slightly surpassing last week’s 1345 high, in a continuing rally that extends back to the end of 2013. Since the 1178 low on the very last day of 2013, the precious metal has rebounded and advanced sharply to rise above key technical price levels. Mid-February saw gold rally well above its 200-day moving average, a situation that has not occurred since a year earlier in February of 2013.
With the clear double-bottom pattern around 1180 in June and December, the price of gold has recently shown significant indications of a potential bottoming out. Having just emerged above the major downtrend resistance line that has defined the bearish trend since the 1800-area high in October of 2012, the price continues to show marked bullish momentum. In the event of further bullish momentum after the breakout above the noted trend line, a key upside resistance target resides around the 1425 level, last hit in August, which represents the peak of the noted double-bottom pattern.
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