Important Levels for Gold on Daily Chart
03/04/2010 12:01 am EST
Price action on spot gold, a daily chart of which is shown, has made a significant bullish move in breaking out above the key 1130 price region, establishing a new six-week high. This occurs within the context of a long-term uptrend.
Despite a false breakdown of the longstanding uptrend support line in early February, gold has gone on to respect the trend line in late February, leading to the current bullishness. On breaking out above 1130 resistance yesterday, a key further upside resistance target resides around the 1160 price region, which represents the last major price high.
Any breakout above that level could potentially reach for the all-time highs established in December. To the downside, tentative support now resides around the noted 1130 level.
Any breakdown below that level should meet strong dynamic support around the level of the noted long-term uptrend support line.
By James Chen, chief technical strategist, FXSolutions.com
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