Gold hits resistance
Early yesterday, gold pushed back above $2,700 but ran into selling which drove it back down again. But buyers turned up just after the US open and soon gold was trading comfortably above $2,700 and testing prior resistance around $2,720. This was where gold topped out three weeks ago, just before the sharp sell-off when it dropped $110, or 4%, in just one day. It finally broke above $2,720 in the early hours of this morning. But it was unable to hold it, and it subsequently dropped sharply back to $2,700 which held as support. A look at the hourly chart shows clearly that $2,720 remains significant resistance. And while stating the obvious, gold needs to break above here with some energy for it to take out the record high of $2,790 hit at the end of October. The daily MACD is encouraging. It continues to point upwards from the neutral area, so is well below the overbought levels seen when it traded at all-time highs. On the flip side, it has rallied a long way so far this week, so overdue some consolidation, at least. But if it can hold above $2,700, that would be very encouraging for the bulls. Things were looking better for silver too. But it’s concerning that it has repeatedly failed to hold above $32 on recent breakout attempts.
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