Why Gold is headed higher

The short answer is price says so. But allow me to explain further. Gold had a good start to 2017. Rising from a low of about 1125 per ounce to over 1275 in the first two months, it started the year with a bang. But then it got mired in a broad consolidation, bouncing between 1200 and 1270 for the next 7 months. It turned out the last bounce off of 1200 in July was stronger as it broke the consolidation and rose to touch 1360 in September.

But the rise turned out to be too much too fast and it pulled back to the top of the consolidation range at the start of October. But it did not fall back into the range. Instead it held and then reversed. It was a small bounce, maybe even a Dead Cat Bounce, barely getting over 1300 before falling back. And that takes it to today. The fall back also held at the 1270 level.

It had been consolidating there over support for 2 weeks before moving up earlier in the week. Now it has crossed falling trend resistance and is moving higher. It has support for more upside from a RSI steadily rising and through the mid line. The MACD also has crossed up and is rising in support. The next levels to watch are 1310, the October high, and 1360 as possible resistance. And a break under 1260 ends the bias to the upside.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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