Gold is trading at $1,735 and it should approach and reach fresh new highs in the short term after the aggressive breakout from a continuation pattern. The price has finally escaped from a minor triangle and now is about to reach the $1,747 former high.
The buyers are very strong, even though the COVID-19 spread has slowed down during the lockdown, but unfortunately, the global risk remains high also because the US and China could step into another trade war. Gold rallied even if the USD remains strong in the short term.
- Gold Triangle Breakout
Gold is bullish and the upside movement could continue as long as the price is traded above the inside sliding line (SL) of the ascending pitchfork. The price has broken above the triangle's resistance and now is expected to approach and reach the R1 ($1,767) level, the upper median line (UML), and maybe the $1,800 psychological level.
We had a great buying opportunity after yesterday's breakout, a larger increase will be confirmed only if the price makes a valid breakout above the upper median line (UML). The upper median line (UML) acts as a magnet and attracts the price, the gold price is expected to reach the upper median line (UML) after the failure to approach and retest the median line (ML) of the ascending pitchfork.
- GOLD Trading Recommendations
LONG - yesterday's breakout from the minor triangle and above the $1,723 level has signaled a further increase and has offered a great buying opportunity, the first target is at the R1 ($1,767) level, while the second one is seen at the upper median line (UML) and at the $1,800 level. The RSI is still showing a Bearish Divergence on the Daily chart, but if the gold continues to increase and the divergence is invalidated, the price will register an aggressive increase towards the $1,900 level, or higher towards the R3 ($1,949) level.
SHORT - we cannot talk about a selling opportunity on the Daily chart as long as the price is traded above the inside sliding line (SL - ascending dotted line) of the ascending pitchfork. A selling signal could appear if the price drops below the median line (ML) and after a valid breakdown below the $1,671 - $1,666 area. So, the near-term support is seen at the sliding line (SL), at $1,700 - $1,666 area, and at the median line (ML).
