Technical Overview: GOLD


 The weaker dollar and increased demand for safe haven assets support gold prices  
 Gold prices could break above a crucial resistance and move toward $1400
Gold prices have increased so far this week the most in the recent two years which could bode well for buyers going forward. Therefore there is the likelihood to see the commodity price breaking its crucial long-term resistance. Do notice that increased demand for gold occurs despite rises across global equity markets and rising US yields. Let us precise that gold jumped the most following the CPI release where we saw a short-lived bounce in the greenback as well. Having said that, the weaker dollar seems to be among the most important factors standing behind gold strength.

Gold prices increase due to the weak US dollar.

It’s worth mentioning that demand for safe haven assets has sped up of late therefore nobody should be surprised to see JPY and CHF higher. Thus, gold prices appear to be well positioned to continue grinding higher over the oncoming weeks which seems to be in line with a technical landscape.

Monthly (MN1)

A monthly time frame illustrates that gold prices are hovering close to their critical resistance. What’s more this level coincides with a local downward trend line. Based on Fibonacci retracements $1381 seems to deserve our attention as it’s underpinned by a 38.2% retracement. So, if the above-mentioned resistance is smashed, it could pave the way for much higher levels.
Are gold prices ready to break their key resistance?

Weekly (W1)

A weekly interval shows a tremendous bullish candlestick which has a chance to close above a 112.8% retracement which would be a confirmation of a breakout of the mentioned resistance giving buyers green light to continue creeping up. If so, subsequent aims might be found at $1381 and $1400 respectively.
Gold prices try to break a 112.8% retracement and this time it could succeed. Source: xStation5
Hourly (H1)
Looking at an hourly time frame one may set a more significant demand zone a touch below $1351. Based on the overbalance strategy one may assume that bulls could resume their uptrend when a $11.6 pullback occurs. If any corrective move exceeds this range, it could lead to an extended retreat ($19).

The overbalance strategy seen at an hourly time frame