Gold Prices Spike to 2011 Trend Line

So which way is gold going to break?
Submitted by Forex Analytics:

As markets closed ahead of the extended three day weekend Chart 1 shows that the recent strength in the price of Gold meant that it was to be found nudging at the line of resistance stretching back to the all-time high in 2011. It concerns me somewhat that this resistance is so clear – when a line becomes too obvious it has a habit of becoming self-fulfilling…. Price tested that line numerous times through 2016 before falling heavily away from it in the aftermath of November’s US election.

The competing claims of Bulls and Bears are clamouring to tell you that we are, on the one hand, about to break through this line into a Golden Dawn for the precious metal or, on the other, that we are going to sink again to the depths of a three figure price tag….

So which way is it going to break? A weekly chart is all well and good for long term investors but most people want much more immediate direction. Because a change of trend or behaviour always becomes apparent on shorter timeframes before doing so on longer ones we’ve been following 240 min Gold and looking for clues.

Chart 2 is 240 min Gold up to Thursday’s close and Chart 3 is the same but with our Pitchfork added. I hope that you can see that by “framing” or “describing” the action via the Pitchfork we are able to detect nuance and moves that we would otherwise miss.

Price moved from initial Support in the circle at the Lower Parallel, via Support along the Quartile to arrowed Resistance at the Median Line. It then dipped to find Support along the green Sliding Parallel before rising again to, and then through, the Median Line.

We are currently watching to see if this Support continues – any move lower, particularly if the Median Line again became Resistance, would alert us to a potentially larger move away from the Weekly Trendline. So long as price remains above the Median Line we will view Gold on this timeframe to be in a Bullish uptrend.

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Median Line Analysis allows us to define and discover lines of Support and Resistance that others just don’t see. Instead of looking at horizontal levels we are looking at the moves in terms of the Path of Price and we use the pitchfork to give a framework to those moves. Not only does this provide High-Probability, Low-Risk entries and exits but we have a massive edge on the market because our different approach allows us to use Supports and Resistances that others just don’t see…..

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