Gold bullish strong resistance overhead; year – year down intact
Best performer YTD, gold is still in a yr-yr down trend, captured by a downward equidistant channel. Resistance from 1300 – 1330, support from 1180 – 1210.
Reasons to long gold
I am as bullish gold as can be; as long as central banks continue to implement/impose negative rates, I don’t see why grandma should not hide cash/pillow at home. Sad to see the purchasing power of one’s savings first be diminished by inflation over years and now deposits to be taxed. I can see a trend – Japan is the not first country to implement a negative interest rate policy and will not be the last. That makes hoarding cash/gold/safes trendy.
Reasons gold price has not reversed, resistance overhead
However it is probably too early for gold bulls to celebrate. 3 months of rally simply does not reverse the year to year down trend that started in 2013 (which terminated the previous yr – yr up trend that topped in 2011). Based on this time frame, gold down trend (no reversal) is a fact. In addition, one can also draw an equidistant channel which also shows a down trend that is intact.
To trade objectively, 1300 – 1330 is a resistance gold must beat. Last year’s highest is 1307.60. 1180 – 1210 is the support zone to watch.