Gold – 23 Jan

Gold has been rather pedestrian lately and has been stealthily moving up through resistance zones. We have quite a series of higher highs followed by higher lows like a staircase. Today’s close above resistance at 1667 now targets the next level of resistance at the 100 day moving average around 1700. RSI has plenty of room to run and stochastic is embedded above 80, indicating strengthening momentum where pullbacks offer buying opportunities. The short term trend is up and a long is correct with the trend until the last swing low is taken out near 1643. Support will come from the 200, 45, and 18 day moving averages all converging in a zone between  1657 and 1622.

The intermediate trend is still lower, but price is just now testing the trend line. If we can get 3 closes above this trend line I feel pretty confident that a move to the right shoulder of a head and shoulders pattern that resolved in December is in the offing. This is the 1750 area shown.

The long term weekly chart shows price dead center within the trend channel. The 3.5 year trend remains intact and as strong as ever. This chart should be appreciated by the paper players and they need to ask themselves if 200% rate of return would have been sufficient for doing nothing more than tossing some coins into the sock drawer? Was the trading worth it? Physical gold, get you some.

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