News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Gold Price Outlook: New Support at Old Resistance

Gold Price Outlook: New Support at Old Resistance

James Stanley, Senior Strategist

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • Gold Technical Strategy: Flat, long setup identified
  • Gold has ratcheted up to a new near-term high, and could offer top-side potential for trend resumption plays.
  • The longer-term bearish channel currently projects to $1,240, and this could offer a top-end profit target for shorter-term long positions.

In our last article, we looked at the vigorous top-side price action being seen in Gold while the US Dollar melted down as a 2015 rate hike was getting priced further and further into the future (now it’s looking more like March-June 2016 for that first rate hike). As mentioned, traders should exercise caution as the five consecutive days of run higher had left near-term price action divorced from any nearby swing-lows; making it very difficult to line up risk management levels for bullish positions.

But over the past three days, we’ve seen prices moderate after a new short-term high was set at $1,191 on Thursday of last week, and this could open the door for trend-resumption positions in Gold.

Of specific relevance is the previous swing-high at the $1,170 region, and this is the level that we had mentioned as the ‘line-in-the-sand’ in our previous article. This price had given resistance two weeks ago, and was finally breached last week; but now is furnishing intra-day support in Gold, and this could be relevant for a top-side entry for those looking for trend resumption of the new bullish-trend in Gold. Traders could look to base stops below $1,161 (38.2% Fibonacci retracement of the most recent major move, taking the 2015 high/low), or $1,155 for a wider, more conservative stop (this is 61.8% of the ‘secondary move’ in Gold, taking the 2008 low to the 2011 high).

On the top side, the immediate target would be at the $1,189 region, as this is the near-term swing-high as well as being the 50% Fibonacci retracement of the most recent major move. After this, $1,200 becomes interesting (psychological level), followed by $1,217 (61.8% of the most recent major move), $1,225 (minor psychological level), and $1,240 (projected trend-line of 2+ year channel).

On the short side, traders would likely want to wait for $1,155 to give way to confirm that the bearish-trend may be returning. If $1,155 gives way, targets could be accorded at $1,127 (23.6% Fibonacci retracement of the most recent major move), $1,100 (psychological level), $1,087.05 (50% Fib retracement of the ‘big picture’ move taking the 1999 low to the 2011 high), and $1,071 (the 2015 low in Gold).

Gold Price Outlook: New Support at Old Resistance

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES