Gold Spikes – Price Action Back in Ascending Channel

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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