Gold Still Bullish Above Key 1500 Level
Gold and the dollar
Gold has closed above the key 1500 level, on the weekly timeframe, and continued the strong bullish trend that has been in place since 2008.
The weak dollar is playing a major part in this trend and as long as the Fed keeps pushing a huge quantity of dollars into markets the decline in the dollar will likely continue.
Metals, and Gold in particular, are viewed as a fit for purpose alternative to the dollar as it slowly loses its reserve currency status.
Gold Technical Analysis
The recent strong bullish move through 1500 – and the subsequent consolidation that had formed around the key figure – seems to show gold is being driven by fundamentals rather than technicals at present. Technical traders will no doubt be looking to buy any dips to the lower trend line, as seen on the attached chart.
The upper parallel trend line may provide some kind of resistance as medium term traders scale out of positions. There are few technical resistance points above the current highs but, as always, a sudden change in sentiment could provide a price action reversal signal. I will not be looking to call a top on this trend for some time to come though.
