Gold has been working steadily higher over the last month of trading. Since late December, gold is up about $100/oz, nearly +10%.
Should you be buying gold? Is this move just getting started? Is it over? Here’s how to tell…
Gold is testing the key zone of resistance at 1218.6 – 1231.1. This zone of resistance, if overcome, would open the door for further upside and shift the larger bias to bullish.
Until and unless this key resistance zone is broken however, gold remains vulnerable to a resumption of the downtrend that kicked off at the beginning of October last year.
On any pullback, there is support established at 1171.1 – 1186.4. While above this support zone, gold is well-positioned to continue to work at breaking resistance.
If this nearby support zone should fail, it would be a signal that the sellers are back in control and would suggest a retest of support around the December low at 1128.6 – 1144.4.