I noted last weekend how Gold had made a bullish descending-wedge breakout move and this is now up over $30 since then. US$ weakness and broad based concern about the global economy is helping to support this bullish move. In this post I look at potential bullish targets for this breakout move.
The bullish descending wedge breakout: Gold weekly: I had been watching this bullish wedge pattern brew for many months and the bullish breakout last week represented a break of a trend line that was over 2 /12 years old:
Gold 4hr: I had suggested in my w/e post that price action might pull back to test either the $1,145 or $1,150 level and we came to within about $1 of a test of $1,150! BTW: a new TC signal evolved yesterday as well:
Gold daily: I tweeted yesterday to watch the $1,170 level as this was the daily 200 EMA and region of the 61.8% fib of the recent swing low move and this level was eventually taken out:
Gold weekly: bullish targets above current levels include the previous S/R levels of $1,200 and $1,250. After that there are the obvious whole number psychological levels and the $1,400 level is also near the intersection of a monthly trend line and 50% fib and might offer some resistance as well. The next major resistance level would be the 61.8% fib of this weekly swing low move that is near the whole number $1,500 level:
Gold monthly: note the monthly trend line here. Any bullish continuation past the weekly chart’s 61.8% fib near $1,500 would suggest a move, via possible stops at whole numbers, back up to test the all time high region near $2,000:
USDX weekly: Gold has been helped, in part, by recent US$ weakness. The US$ is still range-bound within a Flag pattern and heading towards lower trend line support. A break or respect of this lower support near 92.50 might have implications for this Gold move: a break below 92.50 would be bullish for Gold but a bounce up from 92.50 could be bearish:
Summary: Gold has made a bullish descending wedge breakout and this is being supported by the weaker US$ and concerns about the global economy. Bullish targets to monitor in any continuation move include:
NB: I will be reviewing some Gold stocks shortly.