Markets

Rounding Bottom Pattern Suggests Gold Will Hit $1,420

Following the protests in the Middle East during the past month, demand for gold as an alternative investment is reaching new highs. As a result, gold climbed from $1,307 an ounce to the $1,410 level in about four weeks. Due to a mild correction, gold is now trading at $1,402 an ounce, however, what seems to be a rounding bottom pattern in the making indicates that gold might cross the $1,410 level shortly.

• The chart below is the spot gold 2-hour chart by ForexYard.

• There is a very distinct bullish channel formed on the chart, which has reached its peak a couple of days ago, at the $1,410 level.

• The Slow Stochastic continues to point up, despite its high location - above the 80-line. This clearly indicates that the bullish momentum has more steam in it.

• The MACD is on the verge of completing a bullish cross. If the bullish cross will indeed take place, this may verify the bullish notion.

• In addition, a rounding bottom pattern appears to be forming on the chart (highlighted in the blue line). This pattern means that gold is likely to climb back towards the $1,410 level.

• The pattern also indicates that gold has potential to cross the $1,410 resistance level, with potential to reach $1,420 an ounce.

• The next resistance levels are located at $1,410, $1,420 and $1,431.

• The next support levels are at: $1,394, $1387 and $1,375.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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