The bulls took control overnight, breaking through the $1280 resistance level and approaching the 200 DMA for the first time in a year. The 50 and 20 DMAs are both pointing upwards and gold has decisively broken out of the down trend channel.
A move above $1300 is now the target for the bulls, which would see an acceleration higher as shorts start to close out in greater numbers.
The weakening dollar and equities have both contributed to the recent strength in gold, with the poor NFP numbers providing the boost the bulls required to break out of the well established down trend channel.
If economic data continues to disappoint, equities should correct further and gold will benefit. The dollar is now trading well below the key 8$1 pivot and look vulnerable to further selling.
Support can be found at $1280, $1270-$1275, $1266-$1268, $1250-$1255, $1237-$1240, $1220-$1225, $1210, $1200, $1188-$1190 and $1180. A break of $1180 would have serious bearish implications for gold and suggest a decline to $1000-$1050 in the short term.
Resistance can be found at $1288-$1294, $1302-$1305, $1326-$1330, $1350, $1360 and $1377-$1380. The breakout above $1280 suggests an end to the intermediate term down trend, though it will take a close above $1300 to confirm a more significant rally is now developing.
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Gold Market Update: Bulls Took Control
Published 02/11/2014, 06:38 AM
Updated 07/09/2023, 06:31 AM
Gold Market Update: Bulls Took Control
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