Gold Market Update: Gold Powered Higher
Gold powered higher yesterday, breaking through resistance at $1355 and moving as high as $1375 this morning, touching the top boundary of the uptrend channel.
The dollar continues to exhibit weakness, this is driving gold higher however oil remains weak and silver is lagging markedly behind gold – this flashes a warning that the rally may not be built on solid foundations as sliver usually leads gold higher in a bull market.
The RSI bearish divergecne persists and is another signal that all is perhaps not rosy with this gold rally – at the very least caution is warranted. In addition, gold has alomst reached the next longer term resistance level on the weekly chart.
Support can be found at $1360-$1363, $1354, $1350, $1340, $1330-$1332, $1322, $1312-$1315, $1307, $1295-$1300 and $1280.
Resistance can be found at $1375-$1380, $1395-$1400, $1420 and $1435. The breakout above $1300 suggests an end to the intermediate term down trend and that a significant rally is now developing.