Precious metals markets have had a strong start to the year, with gold prices hitting highs that have not been seen since last September. The moves have come as a surprise to some analysts, but when we look at the longer-term trends it is clear that there is still scope for further runs higher.
In the chart included here, we can see that the precious metals markets have shown steady declines since September 8th, 2017. The SPDR Gold Trust ETF (NYSE:GLD)) hit highs near 129.30 during trading that day, and the sentiment has been largely bearish in the timeframes that followed. These times periods are significant for several reasons, as the influence of gold on currency can be extreme in certain cases and we have been watching the price action here for clues to reveal the dominant trend that is unlikely to unfold during the first part of 2018.
For these reasons, the more recent reversals are particularly revealing as they suggest continued upside through the current rally. Near term, support levels in GLD have unfolded near 125.60 and this area is likely to contain prices given the fact that it is a level that worked as resistance previously. Any further bounces from here will put the longer-term highs from 2017 back into focus for those trading in the precious metals assets.
Indicator readings are bullish when viewed through the Commodity Channel Index indicators, and traders can expect a period of consolidation as long as support at 124.30 remains intact. The latest price moves have pushed markets above the upper Bollinger Bands® on the 4-hour charts and this suggests a period of consolidation into next week.