We saw gold price rally during the 6/30 session. It broke above a consolidation range between roughly 1306 and 1325. During the 6/1 session, price held around 1331. This is the resistance and high in April. To validate the current range breakout, gold needs to trade above 1331. If it does, then the 2014-high of 1388.50 is back in the scope.
Gold (XAU/USD) Daily chart, 7/1
If price does not push above 1331, then we need to see if price can hold above 1315, the middle pivot of the broken range. A hold above 1315 reflects respect of the range as a base for another bull swing. A break below 1315 can mean exhaustion, signaling a bearish outlook.
The 4H chart shows a bullish market. The moving averages are sloping up and getting into bullish alignment.The RSI has tagged above 70, even above 80, but has held above 40. This reflects persistent bullish momentum. After the 6/30 session breakout, price has gotten into a near-term consolidation range roughly between 1323.70 and 1332.60. A break above 1333 thus should help validate the bullish continuation outlook. A break below 1323 however brings attention to the central pivot area of the broken range around 1315.
Gold (XAU/USD) 4H chart 7/1
The current breakout is valid unless there’s a break below 1315. Then gold price is likely to come back to consolidation. However, the bullish outlook formed by June’s price action remain in play unless the 4H RSI pushes below 40, and price pushes below the 1285 pivot. Breaking below the 1285 pivot would also break below a rising trendline from June, and signal a bearish outlook.
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