INTERMEDIATE TERM TREND BULLISH
SHORT TERM TREND BULLISH
VERY SHORT TERM TREND BULLISH
In our last update, we said that since testing support at the 50% retracement level at 1820, the price had rallied back up above the 1850 level and had the 50 day Moving Average in its sights once more. We also said that a break of this level would open the way up to a move back to 1900 and beyond.
We also noted that the second half of December until the end of January is usually a strong period for gold and we would not be surprised to see a continuation of the rally through this period and into February 2021.
We saw gold continue to grind higher throughout the second half of December and by the end of the year was poised to break out of the large consolidation triangle we have been in since the all time high in August 2020, with the price just above 1900. As markets reopened in the Far East last night, gold gapped higher and has seen solid follow through buying all day, pushing the price up to 1945 and making a decisive break out of the consolidation triangle.
We expect this to be the start of a strong move higher, with first 2000, then the all-time high in sight. Gold is now above all of the major Moving Averages and looks very strong going into the New Year. We are now back in full bullish mode!
Initial support can be found at 1900, with further support at the 89 day Moving Average at 1889 and the 50 day Moving Average at 1867. The 200 day Moving Average at 1830 will provide further strong support if there is a more dramatic news driven sell off, however we see this is a line in the sand for any declines.
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. As good news on vaccine development continues to arise on a regular basis, equities have pulled back a little but remain within striking distance of all-time highs.
The Dow is currently at 30,722 and has today made yet another all time high of 30,797 and the S&P 500 is currently at 3,771, just below the new all-time high of 3,781 set earlier today.
Oil prices have recovered strongly since testing $34 at the start of November and are now trading close to $50 a barrel for the first time since March. The chart still looks very bullish and we expect oil prices to rally further over the coming months. Our initial target of $50 was tagged overnight, with $55 our new target.
In gold, support can be found at 1912, 1900, 1889, 1867, 1860, 1830, 1800 and 1770. In the medium term, we still expect further gains in the gold price would suggest a move towards 2,100 early this year is likely.
Short term resistance can be found at 1950, 1970, 2000, 2020 and 2080. Gold needs to break the key resistance level around 1970 to give the bulls the power to move back towards the all-time highs above 2000.