Gold breaking higher as the bulls go on a run

Trading outlook:

We are increasingly bullish on gold now as the breakout comes with strengthening momentum. The move comes with upside potential and a breakout above $1611 would be another key move. Support levels are strengthening and near term weakness is a chance to buy.

Support

• $1591 – 3^rd February high
• $1578 – 13^th and 14^th February highs, 17^th February low
• $1571 – intraday low 13^th February

Resistance 

• $1611 – 8^th January high
• $1620 – February 2013 reaction high
• $1628 – Ultra long term 23.6% Fibonacci retracement of $681/$1920

Technical Analysis:

Breaking above $1577 we turned more positive on gold, but with the decisive move above $1591 resistance, we have increasing conviction. Yesterday’s closing level of $1601 was the highest close on gold since 2013 and brings the January spike high of $1611 right into focus. Our confidence levels are increased further looking at the strengthening momentum, with the RSI into the high 60s, a bull cross on MACD and Stochastics bullish into the 80s. We continue to see intraday weakness as a chance to buy and there is now a good band of support $1577/$1591. The two month uptrend comes in at $1571 today. The hourly chart shows a basis of consolidation early today, but the bulls are well-positioned to buy into weakness.