Gold Price: Gold Forges Ahead into Multiple Points of Resistance
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- Gold Technical Strategy: Flat
- Gold has continued to price higher, but has run into multiple points of resistance.
- Continued resistance within the $1,150-$1,160 range could open the door for future short positions.
In our last piece, we looked at how Gold was running into resistance as prices shot higher, while the ‘bigger picture’ down-trend remained intact. But as risk-aversion has continued to grip global equity markets, Gold has continued to drive higher, ratcheting above multiple resistance levels while setting a ‘higher-low’ on Tuesday and Wednesday of this week.
But as we looked at in our last piece, the ‘big picture’ down-trend in Gold is still very much intact. With today’s strength, Gold has run into even more resistance, catching the 61.8% Fibonacci retracement of the ‘secondary move’ (taking the 2008 low to the 2011 high), as well as running into the mid-line of a two-plus year channel (shown in blue on the below chart). This could provide a near-term top in the Gold, and if resistance does hold between this $1,150-$1,160 range, traders could look to initiate short positions to get on the side of the ‘bigger-picture’ trend. For this theme, targets at $1,126 (23.6% Fibonacci retracement of the most recent major move – taking the 2015 high to low), $1,100 (psychological level as well as previous price action support), and then $1,087.5 (50% Fibonacci retracement of the ‘big picture’ move, taking the 1999 low at $253.30 to the 2011 high of $1,920).
Alternatively, should this strength persist, the same targets as identified in our last piece remain valid. In our last piece, we pointed out the $1,147.83 level for triggering a bullish stance, with an initial target cast at $1,155 (the same resistance that’s capped the highs today), $1,170 (psychological level as well as being previous price action resistance), $1,200 and then $1,250 (both ‘major psychological levels’).
--- Written by James Stanley, Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.