Upside levels are in focus for gold
(Kitco News) - Gold technicals are breaking higher this morning meaning someupside levels could be in focus. On Monday, the 200-period simple movingaverage has been taken out along with the orange internal trendline marked onthe daily chart below. These are significant technical zones in theshort-medium term. Now the purple longer-term trendline could come into playalong with the green horizontal area near $1840/oz.
If these aforementioned resistance zones break it could be game onfor the yellow metal. Some inflation measures (especially Europe) are pointingto inflation being an issue for longer than the market originally expected.This could see the yellow metal outperform as it has been used historically asan inflation hedge. U.S. Federal Reserve Chair Powell also recently said thattapering should be the option before raising rates and that could be good newsfor the gold bugs as recent moves higher in rates have sent gold falling.
Looking at the market profile the price is now holding above thevolume point of control at the red horizontal line. If there is to be aretracement this could be the first support. Also, the price could come back toretest the trendline (orange) that has just been broken. For now, resistancelevels need to be taken note of as if this is just an over-exuberant movehigher where might the sellers come back in.
For Kitco News
Follow rajfx10
rdhall@kitco.comwww.kitco.com