INTERMEDIATE TERM TREND BULLISH
SHORT TERM TREND BULLISH
VERY SHORT TERM TREND BULLISH
In our last update, we noted that the 1850 level coincided with the upper boundary of the downtrend channel that has contained the price of gold since the August peak and commented that a break above here should really ignite the buying and see the shorts scrambling for cover. The impressive chart action suggested that this may well be the end of the correction, though 1850 was critical resistance to overcome.
Since that update, the 1850 level was broken, successfully back tested and the powerful rally moved into a higher gear, with the price flying higher with barely a noticeable pullback in the three weeks since our last update. Gold has now broken through 1900 and the next level in the crosshairs is the January 2021 high at 1960.
The gold price is now above both the 89 day Moving Average at 1783 and the 55 day Moving Average at 1778, with these two Moving Averages set for a bullish crossover in the next few days. The 233 day Moving Average at 1850 is now strong support and would be an ideal point to add to long positions on a pull back.
Equities continue to grind higher, fuelled by unprecedented amounts of financial stimulus and liquidity and record low interest rates and continue to make all-time highs on a regular basis.
After shallow pullbacks this month that found support at the 55 day Moving Average, the Dow is currently at 34363, just below the all time high of 35092 set earlier this month and the S&P 500 is currently at 4198, just below the all-time high of 4244 achieved earlier this month.
Oil prices pulled back to $57 after making new multi year highs around $68 a barrel at the start of March, though have now resumed their rally. Our current target for oil is $80.
In gold, support can be found at 1890, 1850, 1800-1810, 1775, 1760, 1725 and 1695-1705. In the medium term, we still expect further gains in the gold price and would suggest a move towards 2350 later this year remains likely.
Short term resistance can be found at 1910, 1925, 1960, 2000, 2020 and 2080. Gold needs to hold key support at 1840-1850 on any pull back to ensure the bulls maintain the power to move back towards the all-time highs above 2000.