After falling from an all time high of $1020/ounce, gold has entered a downwards channel, that has only been broken in recent weeks. Now that gold has broken out of the down channel, the next technical barrier is at around $936, the last high. If gold can break this then the stage is set for a challenge of $1000, as it will have made a “higher high” in its longer term pattern.
As for whether this breach could be made in the next couple of weeks, although indeed it could, we expect that even if any such breach is made, it will be short lived since gold’s technical indicators are near overbought regions. With the RSI at 67 and Full STO around the mid 80s, we could see gold take a breather before moving significantly higher.
That said, gold has taken an important step by breaking out of this down channel and we are still very much long on gold and gold mining stocks as detailed in our portfolio.
Keep an eye on the yellow metal, she appears to be on the move..
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