The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Gold rallies into major trendline resistance
Gold received a welcome boost on Friday from a weak payrolls figure, which negated the potential bearish implications of a flat-lining bottom at $1259. The break through the $1274 high meant that the uptrend remains intact. However, we have since seen the price rally into a crucial long-term descending trendline originating in July 2016. That provides us with a crucial hurdle to overcome for the day. Considering the strength of the rally and the importance of this trendline, there is a good chance we could see gold weaken for the short term.
For that bearish short-term view to come into play, we would need to see the price turn lower from here and post an hourly close below $1279. Alternately, a break higher through the trendline would point towards a continuation of the recent uptrend.