Gold Price Analysis: Bulls back in town through critical resistance

Gold bulls take control in thin markets, testing key weekly resistance.
Old daily resistance would ow be expected to act as support for a continuation to the upside.

The price of gold has been lively on Monday, exceeding through meanwhile resistances as the greenback retreated while investors brace for more critical US data.

Meanwhile, the start of the week's analysis has been challenged by an abnormally large spike despite quite Asian holiday markets.

European investors piled into gold during an exodus from the US dollar which has created a secondary resistance target on the weekly charts as follows:

Prior analysis

''From a weekly chart, the price is testing prior weekly lows to test a 50% mean reversion.

However, the weekly W-formation is a bearish chart pattern, at least to the prior highs and neckline of the formation.''

Live market, weekly chart

As seen, the price did make a retracement to the W-formation's neckline, but only to the wick.

However, there was a confluence with the 61.8% Fibonacci that reinforced the support.

This is equated to a fresh wave to the upside.

A -272% Fibo comes in at 1,810 and a -61.8% Fibo is located at 1,820 as the next upside targets that have a confluence with resistances.

Daily chart analysis

The daily chart is showing that the price has broken daily resistance as follows:

Prior analysis, daily chart

''As illustrated, the price has formed new resistance where old support was.

The bulls might be inclined to take on the bearish commitments for a restest of the structure for the opening sessions of the week.''

Live market, daily chart

As illustrated, the price did indeed go to test the resistance but burst right through it, against the grain of the longer-term charts.

A correction to the old resistance would be expected to hold at least to the structure if not just slightly above it near the 38.2% Fibo.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.