2017 Starts With a Demand for Gold

In our last analysis in the 2016, we were discussing the situation on Gold, where we could spot a nice occasion for a bullish reversal. What we said back then was to wait for the price to close above the down trendline (green) as that was for us a signal to buy. Those who shared our view can now be delighted with the 30 USD upswing and a potential for much more. So how the situation on Gold looks like at the beginning of 2017?
The long-term situation was discussed here in our last analysis. So let’s focus on what has happened since then. We can see that we had mostly bullish days and the price is firmly going higher. Mid-term down trendline (green) was finally broken, which activated the buy signal. With such a strong upswing, we can now try to estimate where we will be able to see the first correction?

In our opinion it should happen around the yellow horizontal resistance (1208 USD/oz), which as we can see is very important for the price of gold, or slightly higher, around 1217 USD/oz. This second level is taken from the potential correction equality movements (blue rectangles) and two 38.2% Fibonacci levels. In theory that area looks like a strong resistance but if this is a start of a long-term up trend on Gold, nobody will be able to stop that.

To sum up, our outlook on Gold is positive and in the next few days we should see this precious metal advancing higher. On those mentioned potential resistances we should wait and see if the supply will be even active. If not, we may be experiencing early stages of a new bullish long-term wave.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis