Bulls Watch for $3,366 Breakout
Near-term resistance is clear at today’s high of $3,366. Therefore, a decisive breakout above that level has gold heading towards a prior lower swing high at $3,396. And it has a good chance of busting through there and continuing to a test of resistance around the recent swing high of $3,451. Slow momentum has been a concern since a trendline breakout triggered on June 2.
That rally subsequently fizzled following the $3,451 high, with gold eventually falling back below the 20-Day MA, where it remains. Therefore, another reclaim of the 20-Day line should be met with some enthusiasm from buyers as indicated by bullish price momentum. And there is the potential for volatility to increase.
Trend Support Retained
Notice that the most recent bounce from support at the 20-Day MA (purple) in early-June was followed by a relatively sharp three-day advance. It ended with a bearish outside day, like today. This only becomes relevant if Tuesday’s support fails and bearish momentum rises. Volatility should increase soon given the convergence of the 20-Day and 50-Day MAs recently. They are now the closest to one another since the beginning of the current upswing that began in January. That could help pump up a bull breakout.
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