Gold Price Technical Highlights:
- Gold continues to work on building a bigger base
- Base is mature but could go on building for a few more weeks
Gold continues to work on building a bigger base
Gone hasn’t done a lot since last discussed a week ago, which isn’t necessarily a bad thing. For short-term traders looking for volatility, yes, not ideal right now, but for bigger picture traders the ‘boring’ price action could be setting gold up for a stronger up-move when it’s ready to break out.
The base has been developing since the middle of April, which is a sufficient amount of time for a strong consolidation pattern to form and lead to a powerful move. But another few weeks could further bolster its ability to accelerate higher.
Since the trend began in mid-2018 there were two important bull-flags that developed during 2019 that lasted between 3-4 months. While the recent congestion isn’t taking on the shape of a bull-flag (horizontal), it is heading towards the length of time the prior resting periods lasted.
Any time now the pattern could break, with 1765 the highest level of the recent period needing to be crossed to get things moving along higher. The 1800 level could be a struggle to cross, but with the length of consolidation developing it may only prove to be a speed bump on perhaps what could be a run to a new record high over 1920. On the downside, the 1658 level needs to hold on a closing basis to keep the consolidation intact, else the risk of a downdraft will increase significantly.
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Gold Price Daily Chart (consolidation setting up for higher levels)
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—Written by Paul Robinson, Market Analyst
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