Gold set to stage fresh breakout
Gold and silver have shown positive movement over the week, keeping their long-term bullish trends intact, as characterised by higher highs and higher lows.
Gold hit a new all-time high in May and has since been consolidating, which has eased 'overbought' conditions in the Relative Strength Index (RSI) on weekly and monthly charts.
On shorter time frames, a potential head and shoulders reversal pattern might be spotted, but on the weekly chart, gold appears to be breaking out of a symmetrical continuation pattern.
Gold has not broken key support around the $2300 area, indicating a potential for another bullish breakout rather than breakdown. This week, it has broken the $2340 resistance level, which may now act as support, with the next resistance level at $2365. A move above $2365 could lead to a new all-time high.
However, if gold fails to break out and drops below the $2300 support, the short-term bullish outlook would change. This scenario would challenge the current bullish trend.
By Fawad Razaqzada, market analyst at FOREX.com
Gold hit a new all-time high in May and has since been consolidating, which has eased 'overbought' conditions in the Relative Strength Index (RSI) on weekly and monthly charts.
On shorter time frames, a potential head and shoulders reversal pattern might be spotted, but on the weekly chart, gold appears to be breaking out of a symmetrical continuation pattern.
Gold has not broken key support around the $2300 area, indicating a potential for another bullish breakout rather than breakdown. This week, it has broken the $2340 resistance level, which may now act as support, with the next resistance level at $2365. A move above $2365 could lead to a new all-time high.
However, if gold fails to break out and drops below the $2300 support, the short-term bullish outlook would change. This scenario would challenge the current bullish trend.
By Fawad Razaqzada, market analyst at FOREX.com
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.