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Gold Charts: Expect Test Of $1800 Resistance Level Soon

By  |  Commodities  |  Nov 26, 2012 08:04AM GMT  |   Add a Comment
 
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Two major moves higher occurred in light of this weakening dollar on Friday in both gold and silver futures. The precious metals had a very strong move higher after the U.S. Presidential election and have been consolidating now for a few weeks. Prices in both gold and silver had strong moves higher on Friday which were accompanied by very strong volume. The daily chart of gold futures is shown below:
Gold_1800_resistance2
Gold_1800_resistance2

Gold futures had a huge move higher today supported by strong volume. Based on today’s action, I believe that we will see the $1,800/ounce resistance level tested in the near-term. Seasonally speaking, this time of the year is bullish for gold and silver and should the strong seasonality correspond with a weak U.S. dollar much higher prices likely await in the precious metals sector.

Members of TradersVideoPlaybook were made aware that I was expecting very strong action in both gold and silver when they broke higher after nearly testing their 200 period moving averages. At the time, I told members that as long as the breakout from the consolidation zone from the July – August time frame held as support, higher prices were likely and that is just what we have seen.

Overall, I believe that the quarters ahead should be strong for both gold and silver. Time will tell whether oil futures and the broader equity markets will also move higher. I continue to believe that monitoring the Dollar Index futures closely is an important part of assessing the directional bias to expect in the months ahead.
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