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by Charalambos Pissouros

Is Gold Set for a New Yearly High?

Gold has been in a rally mode since May 30th, when it tested the medium-term uptrend line drawn from the low of August 16th, last year. Today, the metal continued its journey north, breaking above the 1333 resistance (now turned into support zone), marked near the highs of February 22nd and 23rd.  Bearing in mind that the price continues to trade above the aforementioned upside line, and also that the recent rally has not shown signals of weakness yet, we would consider the near-term outlook to still be positive.

If the bulls are strong enough to stay in charge for a while longer, then we would expect them to aim for the 1347 territory, near the highest point of 2019, which was reached on February 20th. We could see a corrective setback after hitting that zone, but if the bulls appear willing to retake the reins from above the 1333 territory, then we may see another rally towards 1347. If that zone fails to stop the price from drifting further north, then the metal would enter territories last tested in April 2018, and could aim for the peaks of the 18th and 19th of that month, at around 1355.

Taking a look at our daily oscillators, we see that the RSI runs above 70 and still points up, while the MACD lies above both its zero and trigger lines, pointing north as well. These indicators detect strong upside speed and support the case for some further advances, at least towards the 1347 barrier.

In order to start examining whether the bulls have abandoned the battlefield for a while, we would like to see a decisive retreat back below 1323, a support defined by peak of March 26th, also slightly below the high of the previous day. Such a move could open the path for declines towards the 1310 area, the break of which may allow the slide to continue towards the 1303 level, defined by the inside swing high of May 14th.

XAUUSD Gold daily chart technical analysis

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