The bulls are running hard and this is a strong move we are happy to ride. However, we are also cautious of exhaustion signals as extreme moves can also be subjected to extreme retracements.
- $1657 – intraday low, 24th February
- $1649 – gap support – 21st February high
- $1623 – 20th February high
- $1695 – January 2013 high
- $1754 – November 2012 high
- $1795 – 2012 high
Gold has been accelerating higher in recent sessions in a move that has taken the yellow metal to levels not seen since 2013. Strong bull candles have burst the market through the $1611 previous resistance means that the January 2013 high of $1695 is the next resistance of any real note, before $1754. The key 2012 high was $1795. With the momentum of this move still strong, this is a run higher that has little to stop it right now. The RSI is rising above 80 now, but the January bull run saw the RSI above 90 (intraday), so this shows that once the bulls go, there is a real stampede. So, in any bull run we need to be careful of exhaustion signals. The daily candle is now trading entirely outside the 2.0SD Bollinger Bands. There is a also gap this morning from $1649 (Friday’s high) which will need to be watched, but given how the market has reacted to an initial pullback this morning, the bulls remain in complete control. However, the January bull run to $1611 culminated in an intraday spike higher before a retracement of -$75, so reaction to the gap at $1648 could be key near term. For now, the hourly chart shows strong momentum and the bulls are still intent on supporting the market at the traded low today at $1657 and continue to push higher. If this begins to falter the gap could be an early signal to watch. For now we are happy to ride this bull move higher, but in extreme moves, there can often be counter moves to be wary of.