Today lets focus on one of the best performing instruments in the 2017 – Gold. Last time, we were analysing this metal at the end of February. Our view was bullish but the beginning of the March brought us a bigger correction. In the same time, we always say that Gold is a long term investment and you should not be bothered by the short-term downswings. Even better, you can use them to increase your commitment into the long positions. How does the situation look like now?
It is not a surprise that we are higher. What is more, we are very close to a bullish breakout of the long-term horizontal resistance (1255 USD/oz) and a mid-term dynamic resistance (line connecting lower highs, red) It is a third attempt to go higher and so far it looks very promising. After the breakout, if it will happen, we should see the price testing the next important dynamic resistance (upper blue). Breakout here will create an ultimate, long-term buy signal.
Sentiment is positive. When it will be denied? First problems we should see, when the buyers would fail here and now. Failure on the 1255 USD/oz can send the price down, to the lower red line, which is connecting recent higher lows. That is currently the most important support for buyers and if they want to keep the bullish sentiment alive, they have to stay above.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis