Gold traded higher during the European morning Friday and managed to break above the resistance now turned into support territory of 1321. The metal continues to trade within the short-term downside channel that’s been containing the price action since mid-February, but given that yesterday the metal rebounded from near the lower bound of another bigger channel, that’s been in place since the 25th of January, we prefer to take the sidelines for now.
Currently, the metal is headed towards the crossroads of the 1327 resistance and the upper bound of the aforementioned short-term channel. A break above that zone could signal that further upside is on the works and may initially aim for our next resistance of 1332. Another break above that hurdle could see scope for extensions towards the 1337 obstacle.
On the downside, a dip back below 1321 may confirm that the bears are planning to keep the price within the short-term downside channel and could pave the way for the 1315 level. Another dip below that barrier may set the stage for the 1307 support.
Shifting our attention to our short-term oscillators, we see that the RSI edged north and just poked its nose above its 50 line, while the MACD, although negative, has bottomed and crossed above its trigger line. These indicators suggest that the precious metal is likely to continue drifting higher for a while more, at least towards the aforementioned important crossroads of the 1327 resistance and the short-term channel’s upper bound.
