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Gold sees bullish break back into long-term wedge
Gold is today defying the bears by breaking back above two crucial resistance trendlines; one medium-term (one month) and one long-term (two years). This comes following a break higher in silver, which completed a bullish double bottom formation.
However, much of this sentiment is likely to be driven by gold weakness coupled with the fact that gold and silver were at a crucial resistance level which means that a move higher was always likely to be more volatile than other markets.
The interesting thing will be how long this move higher can be sustained. The most crucial resistance point in view is at $1132. Should we see a close above $1105 today, I would expect this to provide a bullish outlook for the week for a move back to $1132.
That said, given the massive selloff that led to our recent predicament, there will remain a certain degree of skepticism to any rally and thus any move back to $1132 would likely be sold into.