Gold has been consolidating its recent gains in a tight trading range around the 1325 support/resistance level for the past three weeks. This consolidation range has formed an extended flag-like chart pattern that appears poised for a potential upside breakout.
The recent rise in the precious metal brought the price up from a low of 1240 in early June to a three-month high of 1333 in the beginning of July. This rise represents a partial recovery of the recent decline from the 2014 high of 1392 in mid-March down to the noted June 1240 low. The partial recovery has thus far reached up to the 61.8% Fibonacci retracement of that decline.
The recent run-up in gold has prompted its 50-day moving average to bounce up off its 200-day moving average, a technically bullish indication. Currently fluctuating within the noted trading range, any strong breakout above the 1333 high and the 61.8% Fibonacci level could prompt the precious metal to advance higher, targeting a re-test of the 2014 high around 1392. Further to the upside is the major 1425 resistance objective. To the downside, key short-term support within the current consolidation resides around the 1305 level.
From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.