Technical Analysis: Gold Could Retest $1,268

Well, that was easy.

In early January 2017, we argued that gold could have just bottomed out after finding strong support at $1,125.  Now, just weeks later, the yellow metal is up to $1,215 with its sights set at $1,268 an ounce.  All it needs to do is break above prior resistance at 1,233.10 and it could run.

As we also noted in early January, when relative strength (RSI), moving average convergence divergence (MACD) and Money Flow (MFI) become this oversold, we begin to see incredible near-term rallies, which is exactly what we’re seeing now.

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Much of the rally is from the continuation of a weak dollar.  Not only did President Donald Trump note the currency was “too strong,” but Treasury Secretary Nominee Steven Mnuchin said, “An excessively strong dollar may be negative in the short-term,” too.

That alone has exerted significant pressure on the U.S. currency, which in turn is fueling the rally in gold prices.  And we can almost assure you, that rally could be sustainable.

As the U.S. dollar breaks below its 50-day moving average to the downside, traders are betting on a move to $99.25, short-term.  Should that fail, the currency could easily break to $99.10, sending many investors to the safer havens of gold.

We also noted that some of the companies well positioned in the gold market included:

  • Harmony Gold (HMY), which ran from a low of $2.45 to $2.55 so far. 
  • Barrick Gold (ABX), which ran from $16.76 to $17.82. 
  • Goldcorp (GG), which ran from a low of $14.49 to $15.7.6
  • And the SPDR Gold Shares (GLD), which exploded from $112.07 to $115.79.

With persistent uncertainty both globally and abroad, the fire has been lit.  Gold could rally.  One, we have overvalued equity markets that have gotten way ahead of itself.  National and personal debt is exploding.  And declines in gold supplies from miners could also boost the price of gold going forward, too.

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Mastery of Their Strategies and Get Paid To Trade! Learn How Here

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