Gold breaking higher from trendline support
Gold has proved a tricky customer over the past 24 hours, with an initial break through triangle support failing to last, sending price higher. The subsequent break through the trendline and $1234 resistance has provided a more bullish picture. However, it is the respect of the triangle top as new-found support, which makes things look more bullish. The price has since rallied to the 76.4% retracement at $1238, which will be key to determining whether we are set for a bearish turn lower or not.
A strong rally through $1238 would provide a lower chance of this recent downturn persisting. However, with gold having broken out of an upward channel, there is a chance we could see a deep retracement within a bearish reversal. Ultimately, a reversal lower from here would point towards a good chance of the market being within a near-term top, while a break through $1245 would signal a resumption of the uptrend.