Gold Spikes – Price Action Back in Ascending Channel

COMEX:GC1!   Gold Futures
Gold climbs higher on traders looking for safety, albeit crude, equities, the ECB or Greece. As what was considered a year for the “secular” bull market to continue higher, 2015 is looking to start the year rather tumultuous.

In “Gold $1,200 – A Line in the Sand,” gold began to form a descending channel after breaking through the previous ascending channel . I did not put much credence into the descending channel because there were several key support levels layered throughout.

They, so far, have held. The two separate channels, interestingly, intersected at $1,204.5 – the 2014 open. Price action has closed above this level, and the geopolitical turmoil have spiked prices to resistance found at $1,224 per toz.

Volume continues to show support, trading above the 20-day average. The bearish price action on the daily chart has been waning, and the + DMI bullishly crossed over the – DMI for the first time since late November. In regards to the directional movement indicator (DMI), the price action has been overly bearish since August. If momentum can be sustained, the + DMI would show increasingly positive price action for the yellow metal.

The RSI has been ticking upwards after breaking out of the current downtrend. If gold can close above $1,224, look for prices to continue to $1,231 before hitting major resistance at $1,240 per toz. – a key point for gold prices.

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