Gold markets initially fell during the week but found plenty of support just above the $1300 level and more importantly, the uptrend line that has shown so much in the way of bullish pressure. Now that we had formed a hammer for the week, we can look at the previous hammer for the week and suggests that perhaps we are going to continue to try to build up enough momentum to break out above the triangle. If we can break above the $1360 level, the market can continue to go higher, perhaps reaching towards the $1400 level next. If we were to break down below the $1300 level, it’s likely that the market would unwind rather drastically, but as we have seen so much in the way of strength at this uptrend line, I believe we will continue to find plenty of reasons to go higher.
There are a lot of geopolitical concerns out there, so of course it makes quite a bit of sense, especially with the Middle East looking so tense. Gold can be used as a safety play with geopolitical conditions, and I think that looking at the mass of ascending triangle suggests that we are still looking to break out to the upside and go higher. If we can finally the $1400 level, the market could go much higher. However, in the meantime I think it’s likely that we will see a lot of back and forth trading, but with a decidedly upward proclivity.