GOLD WEEKLY ANALYSIS – GOLD BREAKOUT FROM FALLING WEDGE

GOLD WEEKLY ANALYSIS – GOLD BREAKOUT FROM FALLING WEDGE
 
From a technical point of view, in last week’s report, we were able to spot the falling wedge formation that gold price action was forming. This week we are experiencing the breakout for possible confirmation of an uptrend continuation.

This breakout was performed this Wednesday by a shy bullish candle, followed by a clear, strong bullish candle as confirmation of the breakout on the Thursday trading session. The same behavior was experienced previously last May when an equal breakout happens to push the yellow metal price to a new high on 1,500 handles representing a 20% gain.

In case the market behaves as in May, we are looking for a possible new high projection that would break 1,600 level and test the 1,700 handles reaching a seven years previous resistance level from October 2012.

Thursday impressive gains and positive traction that rose toward the critical 1,500 handles was due to the Brexit uncertainties that pushed the market mood to turn onto the traditional safe-haven assets, and amid a dovish statement from the European Central Bank where president Draghi stated that they expect interest rates to either remain at present low levels or even lower.

Market have been driven by strong headlines on a more profound global economy slowdown sentiment raised in spite of rounds of rate cuts by most Central Banks has uplifted the appetite for the yellow metal.

As usual, an exciting trading week ahead.