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After five long years, the gold
price has finally broken through a key resistance level and is now heading
towards $1,400. When the Fed announced possible rate cuts starting in
July, after the market closed, the gold price shot up and continued higher
during Asian trading. If gold closes above $1,400 by the end of the
month, it could be setting the stage for another large bull market.
While many precious metals
investors don’t follow technical analysis, traders and major markets movers
are certainly paying attention. And,
the gold price has been stuck below the key $1,360 technical level for the
past five years:
You will notice that the black
dashed line at $1,360 hasn’t been broken (closed above it on a monthly basis)
since 2014. While the gold price has shot above $1,360 on several
occasions, it has not closed above that line on a monthly basis since
2013. This chart shows the gold price as of the close at 2 pm today.
Traders have been watching the
gold technical levels for years and are now getting serious as the BREAKOUT
above $1,360 is a KEY LEVEL of RESISTANCE. If we look at a longer Gold
Monthly chart going back until 1981, you will see what I mean:
When gold fell below $700 back
in 1981, it stayed below it for more than 26 years. However, when it
finally broke above it in 2007, it shot up to $1,000. Then we see the
next two BREAKOUT LEVELS. When gold fell below the $1,360 level in
2014, it has stayed below it, but has been bouncing off the rising BLUE TREND
LINE.
Also, over the past several
years, gold has been trading in an ASCENDING TRIANGLE (blue & black
dashed lines). Once an ascending triangle is broken above the top line,
it can be very bullish for the price action. The next chart shows the
BREAKOUT that took place during Asian trading as gold price hit $1,390+ :
If the gold price closes well
above the $1,360 level, that will be quite positive for the price action
going forward. So, it will be interesting to see what happens during
trading in the U.S. markets tomorrow.
- SRSrocco Report
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