Gold has been marching higher this year within a repeating pattern made up of decent sized rallies followed by periods of consolidation. A major S/R level is just ahead of the metal at $1,250 and I consider this to be the next level to watch for any further consolidation followed by make or break activity.
Gold 4hr: There are a few things to note about this chart. Firstly, note that the $1,250 is just above current price action. Secondly, note how price has this week finally broken up and out above a daily-chart bullish reversal descending wedge trend line. Price had been consolidating within a triangle at the end of last week just under this trend line and I noted this fact in my w/e update. This triangle breakout is now up 220 pips; one of the better moves for the week. Finally, note how since last December price has moved up in lock-step fashion with rallies followed by periods of consolidation. I would expect that $1,250, which is long term S/R seen on the subsequent charts, might give price action a bit of a pause here too. If so, my mantra will be the same, watch subsequent trend lines for any momentum-based breakout activity.
Gold daily: Price action has been on the rise this year with previous trend lines broken and now long gone. The most recent bear trend line belonged to a daily chart-based bullish-reversal descending wedge and this has been in play for some weeks but price has finally made a daily chart breakout from this wedge. Note how price has also broken out above the daily Cloud and 200 EMA:
Gold weekly: the impact of the $1,250 level can be seen more clearly on this weekly chart time frame. Note also the presence of another descending bear trend line as this is a major trend line from the monthly chart. Any break and hold above $1,250 would have me looking for a test of this next trend line. The 61.8% fib of this recent swing low move is up near $1,280 so that would be a level to watch for any make or break as well:
Gold monthly: I’ve long said this chart looks like one very big Bull Flag but we will need to wait and see what price action does IF it reaches up to this zone of resistance. Any bullish breakout would have me looking up to the 61.8% fib near $1,580:
Summary: Watch Gold for any reaction should price reach up to the $1,250 level:
- Bullish breakout targets: whole number levels plus $1,280 and then the monthly chart’s bear trend line.
- Bearish breakdown targets: whole number levels plus $1,200.