Gold reaches new all time highs.
Following on from our post yesterday where we were discussing how to spread bet gold and the recent uptrend for Gold and the key levels to look out for, August Gold briefly cleared resistance at prior all time highs at $1251.4, but was unable to stay there. The new all time highs reached intra day yesterday were at $1254.5 before Gold closed slightly lower at $1245.6
As we wrote yesterday, there is significant resistance at the prior all time high, both from psychological factors and also technical factors. The technical factors were the obvious resistance and the reversal patterns mentioned previously. We said that we would need a close above all time highs at $1251.4 to negate the reversal patterns and to entice new buyers. The same now applies from the new all time highs so we’ll be looking for a close above $1255.
The fact that Gold failed to close above prior resistance at new all time highs makes the market susceptible to a retracement but on the flip side both the long and the short term trends are still up and any move back over new highs can quickly trigger fresh buying and another rally. As before the long term trend remains up and will continue to be so as long as support around $1170 holds.
At LS Trader we therefore continue to stay long Gold. Since we are trend followers and the trend is up we will hold longs until support is breached, consistent with a couple of our key spread trading strategies, which are riding the trend and letting winning trades run.