Gold is trading well above the 20, 50 and 100 DMAs and the breakout of the down trend channel is a significant move, with the potential for a strong rally phase ahead. A break above the 200 DMA, currently at 1310, would confirm that a new rally leg is underway.
The dollar weakness is helping to support gold, whilst equities remain well below their highs. The recent surge in oil has rekindled inflation concerns, with central banks indicating low interest rates are here for a couple more years at least.
Support can be found at 1284-1286, 1280, 1270-1275, 1266-1268, 1250-1255, 1237-1240, 1220-1225, 1210, 1200, 1188-1190 and 1180. A break of 1180 would have serious bearish implications for gold and suggest a decline to 1000-1050 in the short term.
Resistance can be found at 1294-1296, 1302-1305, 1326-1330, 1350, 1360 and 1377-1380. The breakout above 1280 suggests an end to the intermediate term down trend, though it will take a close above 1300 to confirm a more significant rally is now developing.
Today's video for subscribers looks at the recent breakout in more detail and our thoughts for our next trade.