Guidance for short term gold traders, gold's technical, fundamental outlook and near term drivers
Summary
After a brisk rally, gold has been consolidating its gains since mid-Thursday and remains at a crossroads.
Spot gold pulled back from its highs Thursday, but still ended higher for the 3rd straight day, continuing its breakout above the 1218 resistance area.
That's strong resistance. It contains both the upper flat channel line (red on the daily chart) and the 200 day EMA (purple on the daily chart). The recent momentum is more impressive considering that on May 13 gold broke above resistance from its descending April channel as well as its 100 day EMA (light blue on daily chart).
This breakout above all near term resistance suggests possible moves higher into the lower-mid 1220 area in the days ahead
However in the near term the trend has flattened, a normal consolidation move after the recent days' gains. Since 14:00 GMT Thursday the uptrend has slowly made a minor pullback, but continues to hold on just below 1220.
As today's Asian session winds down, that consolidation just below 1220 continues. Short term momentum indicators are turning negative. For example:
Longer term traders should note, however that on the daily chart, the pair is still firmly in the upper DBB zone, suggesting further upside.
