Gold Broke But Couldn't Hold Above Trendline Resistance
Axi | Apr 18, 2017 13:33
Originally published by AxiTrader
In last week's piece on the outlook for gold in a world of heightened geopolitical risk I highlighted the trendline resistance around the $1288 level dating back to the 2016 high at $1375 was actually a continuation of the line which has its source at the 2011 high of $1920.
That makes it a very important level of resistance.
And it's a level worth watching in the months ahead.
But traders deal mostly in much shorter time frames than the monthly charts I use as a guide. So it's worth noting that on the daily charts gold appears to have had its first foray - and failure - to hold above this line over the past 24 hours.
By no stretch of the imagination does that mean gold prices can't rally.
However, traders cleared bet last night that even though the rhetorical positions of both the US and North Korea remain somewhat belligerent the failed missile launch over the weekend has reduced tensions a little.
I'm not convinced as Pyongyang's comments that it could test missiles weekly last night suggests.
But for now, traders have respected the line and prices have failed initially.
The 4-hour charts suggest a move back toward the $1274/78 region, perhaps $1263/64.
Longer term though I'm still watching how gold ends the month.
Silver broke it's long term trendline 3 months ago and is trying to go higher again this month. Net longs are huge right now - so we'll see.
If both silver and gold break out at the end of April it could be a clear sign that volatility in global markets is about to increase.
Have a great day's trading.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.