Gold held its support at 1,350.00 yesterday and it seems it is gathering power for an upward move to new highs towards 1,390.00-1,400.00. The downward pattern from 1,382.00 was overlapping and most probably is a correction. Prices have reached the lower boundaries of the upward sloping channel and we now expect prices to test 1,382.00.
Breaking above the 1,374.00 short term resistance will enable buyers to push prices towards 1,390.00-1,400.00. Support is now found at 1,358.00 and 1,350.00. Holding those price levels will help Gold reach our first target which is 1,400.00. Higher targets like 1,425-40.00 are possible but we will have to wait and see the structure of the rise before we reach any conclusion about possible targets.
The daily chart above supports our view that the recent move is just a sideways consolidation before we see a break upwards towards 1,400.00. Concluding we are bullish since support at 1,360.00 and 1,350.00 holds. We believe that the current setup justifies a move towards a new high at 1,390.00-1,400.00.
