Gold Technical Outlook:
- Gold gets a big boost on Russia/Ukraine headlines
- Rally coming from a strong base, new highs look near
Not long ago I was discussing the big-picture outlook as bullish, even if the short-term picture didn’t look so good at the time. Gold had been building a solid pullback/consolidation pattern since its peak in August 2020, and at some point the overall price action was set to lead to another thrust higher.
With the breakout last week above 1877 conviction further increased, and now with gold adding even more gains on the heels of the Russia/Ukraine situation deteriorating, we are seeing price climb above another set of important thresholds.
The mid-year high from 2021 at 1916 has been firmly crossed which leaves the record high at 2075 open to be hit and exceeded. We may not see it happen immediately, especially if the recent surge is negated a bit on a positive shift in geopolitical tensions. But overall the way we are seeing gold break out suggests it won’t take too long.
The long-term trend is higher and with gold from mid-2020 until recent becoming so quiet and out of favor, it set the stage for another major move. Sentiment towards gold had turned rather dour, whether it was due to BTC or the failure to act as an inflation, or both, or some other contributing factors combined.
Regardless of what it was, the stage was being set and with the trend reasserting itself in a major way. It is hard to say how high gold could go in the coming months, but it seems reasonable to believe gold could at least cross 2075 by a double-digit percentage before undergoing another meaningful correction.
At this juncture it will take a lot to negate the breakout and flip the script bearish beyond a near-term correction.
Gold Daily Chart
Gold Monthly Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
