Long constrained between $1,180 and $1,300 an ounce, gold has finally broken out on the upside, only to find itself trading within a new, albeit higher, range. Gold now enjoys a “floor” of solid support at $1,300 with initial support kicking in around $1,340. On the upside, initial resistance kicks in around $1,385 and continues up to the psychologically important $1,400 level - but, as outlined below, this “ceiling” could prove vulnerable in the weeks ahead.
Gold’s technical picture has improved quite significantly in the past week as prices rose through several layers of overhead resistance to trade at one point as high as $1,385 an ounce. Importantly, momentum has shifted from negative to mildly positive - and further price advances now have the potential to trigger a buying spree among some of the very same institutional traders and hedge-fund investors who not long ago were aggressive sellers of physical gold and paper proxies.
Recent news that some hedge-fund managers, including the likes of ...