Golden Breakout: Potential for 1,486 for spot gold

Intermediate
  • We upgrade our neutral conviction on GOLD, mentioned in our prior post, to buy.
  • Yesterday saw a solid 1.3% rise in XAUUSD on the back of a weaker USD, Middle East tensions and Ray Dalio comments.
  • The precious metal broke above key 1,438.63 resistance and a consolidation pattern. A close near the top reinforces bull sentiment.
    • 1,438.63 is now acting as support to price and a failure to close below could be detrimental for bears.
  • A pennant pattern has broken out and targets  1,537.11 (MPO calculated from 11-25th June rally)
    • The downtrend line of the pennant pattern may offer buying opportunities if the 1,438.63 support were to be violated intraday.
  • If the pattern is seen as a symmetrical triangle, then its MPO is at 1,486.85.
  • First major resistance comes in at 1,483.07. This is the 50% retracement of the 2011-2015 selloff.
  • Trending and momentum setups reinforce the upside. 200/50/21-Day EMA’s are trending northbound and reside at 1,309.35, 1,369.53 & 1,405.06 respectively.
    • MACD remains above zero and is touching. A bullish cross would reinforce further bullish potential.
Gold Chart

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