Gold has been trading sideways in the short term, it is still trapped within a minor triangle, but the price could explode soon and it could hit fresh new highs. The global uncertainty and risk keep the yellow metal in the buyer's territory.
Gold is trading at $1,707 and it could register a significant move soon as the US is to release high impact data, such as the ADP Non-Farm Employment Change, NFP, Unemployment Change, and the Average Hourly Earnings.
The outlook is bullish as the gold price continues to stay above the $1,700 psychological level and above the inside sliding line (SL) of the ascending pitchfork. A valid breakout from the triangle pattern will confirm a further increase with a first upside target at the R1 ($1,767) level and at the upper median line (UML).
I believe that a further increase will be invalidated only after a valid breakdown below the $1,671 level and below the weekly Pivot Point (1666) level. In the short term, we cannot exclude a minor drop as the USD rallies and dominates the currency market.
- GOLD TRADING RECOMMENDATIONS
A triangle upside breakout will lead the price towards the R1 ($1,767.36) level and towards the upper median line (UML), which represents strong dynamic resistance. The $1,800 psychological level and the R2 ($1,848) are seen as potential targets as well if the gold price stays above the inside sliding line (SL) of the ascending pitchfork.
However, a triangle downside breakout and below the SL, followed by a valid breakdown below the PP ($1,666) and below the median line (ML) will validate a corrective phase, major drop, on the Daily chart. The $1,600, $1,555, and the $1,484 levels could be set as downside targets.
