Technical Analysis - Gold - Still consolidating recent gains but holding up well overall

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William Adamswilliam.adams@fastmarkets.comHead of Research+44 (0)20 7264 2489
Short term:Up
Medium term:Flat
Long term:Down
R11623 RL
R21653 Long-term DTL
R31671-1684 Series of highs
S11653 Long-term DTL
S21627-1641 Former highs
S31622 UTL
S71532-1522 Triple bottom
Turns lower

DTL = Downtrend line

DMA = Daily moving average

MACD = Moving average convergence divergence

BB = Bollinger band

RL = resistance line



  • Gold's strong rebound after its break from the base triangle looks robust but, unsurprisingly, prices are now encountering some resistance from the series of mini-peaks from March and April that start at $1,671 and run up to $1,715.
  • Prices are, however, holding above the long-term DTL (green line), which is encouraging. 
  • The stochastics remain negative, which suggests prices will continue to consolidate. But, with the MACD climbing still, we would not be surprised if any consolidation proved short-lived. 
  • We have viewed the extended period of sideways-to-lower trading that followed last year's high as a period of consolidation following the rapid and long rally off the 2008 lows that ran from $682 to $1,921. After such a move, it is little wonder that the market took its time to consolidate.
  • Having the recent breakout, we are now waiting to see the degree to which sentiment has turned bullish.


We expect dips to be well supported - a move up above $1,677 would start to look interesting.

All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.
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