WILL GOLD BREAK ABOVE A LONG-TERM DOWNSIDE LINE SOON?

Gold is bullish as of 9th November 2021 as the U.S markets start the week. A weaker U.S dollar coupled with global inflation concerns has given the yellow metal the boost to break past the $1,800 trading range. It has been in a rally mode since Thursday, after hit hitting support at 1758 the day before. Although that rally was stopped near the downside resistance line taken from the peak of August 6th,2020. The metal remains below that line, but it also trading above an upside line taken from the low of August 9th, this year. Thus, as long as it remains between those two lines, we will stay neutral.

For us to start examining further advances, we need to wait and observe a break above the crossroads of the aforementioned long-term downside line and the key resistance level of 1834, which has been acting as a temporary ceiling since July 15th. Another stop may be the 1857 line, marked by the inside swing low of June 4th, the break of which could pave the way towards the peak of June 11th, at 1903, or the high of June 1st, at 1917. If none of the territory is able to stop the advance, then a break higher could see scope for extensions towards the high of January 6th, at 1959. But changing our attention to our daily oscillators, we can observe that the RSI rebounded from slightly below 50 and is now close to 70, while the MACD lies above both its zero and trigger lines, pointing up. Each of the indicators discover decent upside speed, recommending that the metal may have the necessary capability to overcome the downside line this time around.

While On the downside, we would like to see a dip below 1758 before we start examining whether the bears have stollen the bulls‘ swords. Such a move could also confirm the break below the upside line taken from the low of August 9th, and perhaps initially allow declines towards the low of September 30th, at 1721. If that barrier doesn’t hold either, then we could see the fall extending towards the low of August 9th, at 1683, a territory that provided strong support back in March as well.

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