Gold closed the week at $1,285 per ounce, holding steady after breaking through the resistance line on the 60-day chart. Now that prices have broken through that $1,280-per-ounce resistance line, it becomes the new support line (see the following chart).
This initial breakthrough helps confirm that the trend has become bullish on the daily scale. This early indicator generally shows the start of corresponding moves on the weekly chart.
In addition to the double bottom identified in last week’s column (see the blue line on chart), we now have more evidence that the bottom level support is set. This may present a gold buying opportunity, especially as gold remains below $1,300 per ounce.
Other buying opportunities may come when prices move above the 50-day and/or 100-day moving averages.
Rick Andrews is president of Avant Capital Management