UPDATE: Gold's former breakout line becomes support!

OANDA:XAUUSD   Gold Spot / U.S. Dollar
This is an update of my prior call in gold which worked out about as well as a call could have.

After ricocheting from the illustrated overhead resistance line twice since our last trade, gold is now going in for a third test as I write this. While it may not break this time, we should stay on watch for a potential breakout as a breach above this line probably has the potential to eventually send gold to its former highs.

Fundamentally, there still remains good reason to believe gold will go higher. The market rallies everyday, but with it we are seeing higher inflation . Pair that with a Fed that insists it is on hold for the long run and it's highly likely that we will see higher asset prices all across the board ( gold , oil , other commodities , equities) until the Fed decides it needs to tame inflation .

Let's buy gold on a break above the overhead resistance line illustrated above.
Target 1: 1316
Target 2: 1325
Bonus Target 3: 1345
Trade active: The line has been broke, trade active. Using 1299 as a stop.
Comment: Ripping here to target 1.
Trade closed: target reached: Target 1 reached. Keeping this on for targets 2 and 3.
Comment: Target 2 hit today.
@TradeWithAdam, I'm thinking this might be working it's way into a H&S pattern, which would limit it's current run and put a downside target at around 1297 which was previous resistance more than once. Time will tell I guess, but something to be watching for. What do you think?
@miket56, I don't think that's the case, but anything is possible. I'm going to stick with my call. I'd imagine the Fed will provide tailwinds to gold when they re-iterate their dovish stance today.
miket56 TradeWithAdam
@TradeWithAdam, as it turned out it pretty much did both. You were fortunate with your S.L. Well done.
@TradeWithAdam, I like your ideas behind this. Hope the .382 Fib doesn't stop the run.
+1 Reply
@miket56, Thanks!
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