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Gold Market Update: Gold On Verge Of Breaking 16-Month Down Trend

ByGoldTradingExperts.com
Published 01/24/2014, 05:25 AM
Updated 07/09/2023, 06:31 AM
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Gold surged higher yesterday after testing the 20 and 50 DMAs around $1232, taking advantage of a tumbling dollar and equities to make a new high for the week at $1266.

Gold is on the verge of breaking out of the major 16 month down trend channel which would be a significant event. A move above $1300 would suggest a bottom was and a new rally leg was about to unfold. However, there is a huge amount of resistance above the current price before that can be considered a real possibility.

It is interesting to see how entwined the fortunes of gold and equities have become, with gold struggling for all of 20$13 as stocks made successive all time highs. We maintain our stance that a major rally in gold cannot begin unless or until we see a major corection in the stock market.

Support can be found at $1250-$1255, $1237-$1240, $1220-$1225, $12$18, $1214, $1210, $1200, $1190, $1188 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 $1268-$1270, $1277-$1280 and $1291-$1295. A break above $1268 would suggest an end to the short term down trend, though it would take a break of $1300 to suggest a more significant rally was developing.

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