Is This the Tradable Breakout in Gold?

Wednesday saw a huge impulse movement for Gold into a key target.  What happens if Gold breaks through the current key target resistance level?

Let’s highlight our key levels and plan for the immediate future:

A quick look at the Daily Chart shows a recent sideways consolidation between $1,180 and $1,220.

Note the Fibonacci Retracement Grid which places the 50% “Halfway Point” into the current $1,225 level.

We’ll simply focus our attention at the $1,225 pivot and plan accordingly.

Also note the resistance/reversal intraday candles from February and April that occurred into $1,225.

For now, we’ll note an upside breakout above the $1,225 zone to target a swing toward $1,245.

If gold buyers can push the price firmly beyond the $1,245/$1,250 level then it would trigger a movement into a visual “Open Air Pocket” which means gold could move quickly, impulsively back toward the $1,300 per ounce level.

Otherwise, $1,225 is our focal point for a possible resistance swing down toward $1,206 and possibly under $1,200 to continue the mini-range.

Here’s the same chart with a few more indicators and volume added:

Today’s price action takes gold ABOVE the falling 200 day Simple Moving Average along with the upper Bollinger Band.

Once again, a sustained movement higher could result in a swing toward the $1,300 level into the future.

Volume was noticeably strong on yesterday’s strong bullish impulse bar which suggests buyers do have the wind at their back to trigger a short-squeeze and breakout.

Whatever other strategies you’re using to trade or study gold, be sure to incorporate the current levels and simple targets into your planning.

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

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