Gold - On the brink of a breakout??

FX_IDC:XAUUSD   黃金 / 美元
After a surprisingly strong and especially fast rally from an oversold bottom mid of December at 1,236 USD up to 1,365 USD within less than seven weeks and the recent pullback down to 1,305 USD gold             has been rushing back up towards 1,360 USD over the last couple of days. While enthusiasm among the goldbugs has certainly increased, the question remains whether it is really justified and whether gold             indeed will be able to break out.

1. Gold             Weekly Chart
Looking at the weekly chart gold             has reached the important resistance line again and is trying to break out. If we assume that the last four and a half years have been some kind of a bottoming process and that gold             has been moving within an ascending triangle over the last two years a breakout above 1,360 USD on a weekly basis would certainly be a pretty bullish signal. In that case using the height of the triangle would give us a theoretical target around 1,630 - 1,650 USD. Of course on the way to this distant number gold             needs to clear the massive resistance zone around 1,500 - 1,530 USD first which won't be easy at all!
Unfortunately on the weekly chart we find the slow stochastic oscillator close to its overbought zone which definitely raises doubts whether gold             indeed is ready to break out now. Actually just judging on this oscillator gold             would probably need more consolidation between 1,280 and 1,350 until early summer before the bulls have enough power to boost sustainably through this longterm resistance.
As well the ascending triangle might simply demand some more consolidation as the formation doesn't really look in its final stage. Gold             could easily swing between 1,250 USD and 1,350 USD without disturbing the improving picture.
Another resistance comes in form of the weekly Bollinger Band which currently sits at 1,363 USD. Generally 95% of the time prices are moving within these two bands. Therefore gold             would really need to deliver a feat here to push the Bollinger Band higher. With the weekly chart being close to overbought this might be challenging.
But it is very obvious that gold             is at an important juncture and that bulls are gaining more and more control. If gold             can break through the multi-year resistance line we could quickly see a rally towards 1,500 USD despite any seasonal patterns.

2. Gold             Daily Chart
The daily chart zooms into the last two years in the gold-market. While failing at the horizontal resistance zone between 1,350 USD and 1,375 USD again and again we can clearly see a series of higher lows which is pretty constructive. Gold             is moving above its 200MA (1,284 USD) as well as above its 50MA (1,314 USD) which was slightly missed during the recent pullback. The chart is looking more and more bullish .
But here too the slow stochastic is overbought and does not offer much more room on the upside. If you´re familiar with my analysis you know that there is sometimes this special situation where the slow stochastic oscillator can transform into an embedded status and lock in the uptrend while being overbought. This situation is not normal but rare and is still at least four trading days away on the daily chart . Usually the stochastic will simply roll over in such an overbought situation. Gold             has good support around 1,305 USD - 1,310 USD and very strong support between 1,260 USD and 1,280 USD.
If gold             can hold above 1,245 USD for some more days odds definitely supporting a breakout and a continuation of the rally. If gold             instead moves back below 1,335 USD the bull attack has failed and corrective wave down because very likely. Actually if gold             can not take out the January highs at 1,365 USD the current up wave might just be a minor B and gold             would be right in front of lower prices...

3. Conclusion
Gold             is acting pretty bullish but .... https://www.midastouch-consulting.com/gold-update-16022018
gold just touch 1330 .. good analysis and support !!!
any comments for next step ? so now right to the lower prices rite ?
@AvisCheung, yes gold below 1,335.. odds are now favor further downside as expected.. we should see gold below 1,300 again over the next couple of weeks
AvisCheung MidasTouchConsulting
@MidasTouchConsulting, but now seems a short rebound in 1308-1306 , any advice now ? up to 1326 than short again to 1300 ?
@AvisCheung, I don´t know exactly but yes something like this seems possible... gold is in a very quiet situation.. I am standing at the sideline waiting for June/July before that probability for a larger move is not that big. as well I still think gold has more downside ...
AvisCheung MidasTouchConsulting
@MidasTouchConsulting, okay follow you!
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