Looking to catch that sharp surge in gold prices?
Here are some levels to watch if you’re going for a breakout or a pullback.
Gold (XAU/USD): 1-hour
Remember gold’s symmetrical triangle pattern we were watching a few days back?
Not only did the precious metal bounce off the support area, but it also busted through the triangle resistance and $2,000 major psychological mark!
If you’re looking to hop in on this rally, you might wanna consider waiting for a short-term correction to this month’s newly-forming ascending trend line.
This happens to be right above the former triangle resistance, which might now hold as support, and the dynamic inflection points at the moving averages.
Although the 100 SMA has already crossed above the 200 SMA to confirm the presence of bullish vibes, Stochastic still looks ready to move down to suggest that a dip is due.
Then again, XAU/USD appears to be forming a bullish flag pattern, so keep your eyes peeled for an upside breakout from the current consolidation.
If this scenario plays out, gold might be in for another jump that’s the same height as the flag’s mast, which spans around $1,980 to $2,020.
Anti-dollar moves seem to be the main reason behind the pop higher in gold prices, as downbeat U.S. job openings and factory orders data further dampened Fed tightening hopes.
Apart from that, the rise in oil prices spurred by the OPEC output cut could boost price pressures, which might also turn out bullish for gold as a hedge against inflation.
