Continuing our recent posts on gold and how to spread bet gold, we look at what’s been happening in the August Gold contract. After a few failed attempts at resistance around $1250, Gold has finally broken through to new all time highs and has been able to close above prior all time highs for the first time since new highs were posted back on the 12th May. This carried more significance as the close above resistance was Friday’s close, and Friday’s close is the most important close of the week. Ideally we look for another close on Monday above this level for further bullish confirmation.
Last week we wrote that if we could get a close above all time highs around $1255 that that would negate the reversal patterns and possibly lead to the next wave of buying pressure, which could push the market higher once again. This has now happened so the price action next week will be worth keeping an eye on for further moves.
Since we are now at all time highs there are no further resistance areas to look at for potential targets but what we can do if we get another close above prior resistance early next week is to add the height of the prior ascending triangle which is around $80 to the top of the range, effectively giving us a target of around $1335.
We have written recently that Gold is priced in US dollars and that as a general rule the prices have an inverse relationship, with a rise in one usually followed by a decline in the other. One of the bullish factors for Gold of late has been that it has continued up around all time highs in spite of the US dollar’s recent good run. The last couple of weeks however has seen weakness for the US dollar and if this weakness continues this may be another factor to help the Gold market higher.
If we don’t get another close above $1255 early next week then we may see some weakness possibly back towards the $1200 level. For now the trend is firmly up and the odds favour higher prices.
At LS Trader we remain long Gold and have been long Gold since we entered the market back on the 26th April at $1153, so we are currently sitting on profits of over 100 financial spread betting points or $100 in Gold terms. Gold is very easy to spread bet and can be traded on any number of financial spread betting platforms from as little as £1 per point, and the best part is that since this is spread betting, all profits are tax free.