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Gold has been gaining ground over the past week, with the price rising from a crucial area of support. The long-term picture portrays a gold market that could be on the cusp of a prolonged period of upside, given the continued uptrend that has been in place since the market bottomed out in December. The creation of higher highs and higher lows evident on the weekly timeframe highlights the fact that the weakness we saw throughout September is likely to be a retracement of the rally from $1205. With the price having retraced 61.8% of that $1205-$1357 move, there is a good chance we are seeing the beginning of the next leg higher for gold.
The weekly chart below highlights the existence of a crucial trendline confluence, which appears to have provided sufficient support for the market to push higher from here. With the price having engaged the $1296 resistance level this week, it is worth noting that the $1296-$1303 zone represents a crucial area that needs to be broken to provide greater confidence that this move will sustain.
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