GOLD ($) - on upward trend
Trend: Medium and long term up. Short term down, getting oversold. Strategy: Buy the gold price itself (ie bullion).
• The dollar gold price broke out of a large channel in January (lines 1 and 2). The price has now pulled back to retest line 2. It’s also trading in a rising channel (lines 3 and 4). Line 3 is important short-term support at $640 on its spot price. • The daily relative strength index (RSI, on top) is quite oversold but can have another dip to the oversold level before moving up again in earnest. Nevertheless, the strategy now should be one of buying on pullbacks. Closest support is line 3 at $640. Buy gold futures on an upward reversal as close to there as possible. • The upside targets are currently $690-$710, as well as a more medium-term target of $750, ie the height of channel 1-2 projected up. The stop-loss when buying on a pullback is a closing price below $634 (spot price).