Gold price accelerated higher on Friday, offsetting initial negative signal that was developing on daily chart, from Thursday’s Hanging man candlestick.
Fresh gains (up 1% until early US session on Friday) came ticks ahead of gold’s record high ($2790, posted on Oct 31) and signaling that bulls remain firmly in play.
The yellow metal is on track for a fourth consecutive weekly gain and about 6% advance in January, with recent rally being sparked by uncertainty surrounding President Trump’s trade policies, particularly the latest signals about softer approach to China tariffs and possible trade deal, as well as his calls to lower interest rates.
Contradicting signals in first few days of Trump’s new term in the White House weakened dollar and boosted demand for safe haven gold.
Retest of new all time high and attack at nearby $2800 psychological barrier could be likely scenario in coming sessions, with sustained break higher to signal continuation of larger uptrend, which was on hold during past nearly three months for consolidation.
Fundamentals are likely to remain favorable as reality somewhat diverges from Trump’s post-election rhetoric, particularly in foreign policies, while technical studies remain in firm bullish configuration on daily and weekly chart and underpin the action.
Recent break above bull channel resistance trendline signaled that bulls tighten grip.
However, bulls may face increased headwinds from very significant $2790/$2800 resistance zone and enter consolidative phase before resuming higher.
Dips are likely to be shallow (if current environment remains unchanged) and offer better levels to re-enter bullish market.
Former breakpoints at $2730/21 zone now act as solid supports which should keep the downside protected.
Res: 2784; 2790; 2800; 2850
Sup: 2761; 2748; 2730; 2721
