(OroyFinanzas.com) – Despite a number of adverse technical indications, gold looks set to break strongly higher next week. While silver broke spectacularly higher last week, partly in response to marked weakness in the dollar, gold did not, and was kept in check by resistance approaching its early February highs.
Other factors that contributed to restraining gold were the current very large gap between its 50 and 200-day moving averages, and the fact that it is still near the return line of its long-term uptrend channel, shown on the 5-year chart below. However, a combination of continuing strength in silver and a weakening dollar are expected to result in gold overcoming these difficulties, and, since many market players are not positioned for this, the resulting breakout could be quite dramatic, and result in strong gains in gold stocks.
On the plus side, gold is not very overbought on a short-term basis, as revealed by the RSI and MACD indicators on the 1-year chart. The latter has given a buy signal by turning up and rising through its moving average. The MACD histogram, the shaded area around the zero axis, is also looking positive. The 5-year chart shows a big reason for gold dragging its feet compared to silver – it has been struggling with the heavy resistance at the return line of its long-term uptrend channel. Should it break clear above the return line in the near future, a spectacular vertical ascent will become a real possibility.
Source: www.clivemaund.com
© OroyFinanzas.com
Be the first to comment on "Gold looks set to break strongly higher next week"