Gold Goes Boom as High Trend Resistance is Bulldozed by BullsGold’s recent winning streak continued last week as it gained 6% in value, extending Gold’s four-week increase to 10.7%. The commencement of this week has seen fresh bullish themes hit new highs, as prices break out into five-year highs!
Taking a step back and viewing the wider perspective of the yellow metal’s history within the technical analysis, we can see that in 1999 a slow inclination was present stretching across the period of just over a decade, reaching its peak in 2011. The topside run was then posed by a 50% pullback over the next eight consecutive years following the high of 2011, prompting Gold to spend many recent years in a state of consolidation. This was until we hit 2019 where Gold has seen highs reminiscent of eight years ago.
Gold Monthly Price Chart Overview (2000 – 2019)
Gold has demonstrated a batch of resistance through low periods previously on the chart. Therefore, despite the precarious top line demonstrated recently and some traders doubting the stability of Gold’s future value, the yellow metal has established it has been able to hold highs through previous similar themes. However, this week bullish efforts have been able to bulldoze through Gold’s resistance and for the first time since 2013 Gold was trading at huge highs of above 1400. Which is a huge leap from the supportive 1275 that was demonstrated three weeks prior.
So why has Gold gone boom and is this trend set to continue? Events in the headlines clearly contributed to the events of last week and continuing onto this week, with the Fed and the Central Banks clearly holding onto a dovish posture. Again referring back to Gold’s bullish trend in 2011, this took place as a result of the Financial Collapse where Global Central Banks also posed a dovish posture. The synchronicity of the two events resulting in a boom for Gold is not difficult to determine. As a result, this could indicate that there is a further top side to come for Gold in the up-and-coming weeks if the trend is to continue with similarity.
Gold Monthly Price Overview (February – June 2019)
Given the dramatic boom for Gold this week due to world events, prices have become so far stretched from any nearby trends, that even bullish strategies are hard to predict for Gold this week. However, the significance of the trend and it’s a similarity to that of events in 2011, do promote the response that the technical forecast for the week ahead is set to continue to be bullish. At the time of writing Gold was at 1414.74.
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