Gold is chipping away the key descending trend line hurdle this Friday and looks set to break higher, especially if the US wage growth numbers print below estimates.
At the time of writing, the safe haven yellow metal is trading at its 100-day MA level of $1276. On a weekly basis, the metal trades flat lined, while, on a month-on-month basis, it is up just 0.27 percent.
The upside in Gold has been restricted around $1280 levels since Oct. 26. During the same time period, the metal has been clocking higher lows. The price action suggests the bears may have run out of steam.
Daily chart
- Potential double bottom ($1260) formation, neckline resistance is seen at $1306.05
- Strong resistance at $1278 - confluence of trend line sloping upwards from the Jul. 10 low and Oct. 6 low and trend line sloping downwards from the Sep. 8 high and Oct. 16 high
- Higher lows pattern since Oct. 27
- MACD flat line since Oct. 20. An extended period of consolidation/flat action on the MACD is usually followed by a big move
View
- Gold looks set to $1284.15 and revisit $1298 (50-day MA), $1300 (psychological level) and $1306.05 (double bottom neckline).
- On the downside, a break below $1260 (& 200-day MA level of $1261.77) would open doors for $1251.50-$1250 levels (support of trend line sloping upwards from Dec. 2016 low and July. 10 low).
- What if gold closes above $1306.05? - It would signal double bottom breakout and would present an upside target of $1349 (target as per the measured height method).
Focus on US wage growth data
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