The rebound in gold prices from the June and mid-July lows has been maintained, with spot gold moving back above 650 dollars/oz to highs of 656.20 dollars/oz during the week. However, prices ran into strong resistance around the down-trend line and ended the week still inside the triangular flag formation (see chart). Gold looks poised to break out, but could consolidate further for a while until there is enough buying to overcome resistance in this area. An upside break is preferred from either a technical and fundamental standpoint. With the key down-trend line on the spot chart around 650-655 dollars/oz, any move above this level would look bullish. It would take a move back below 620 dollars/oz, where the up trend line is, to make the market look vulnerable to a break to the downside.
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