Chartcheck Gold: Fourth attempt at a break out?

Source: Depositphotos

A slight downward trend can be seen in the summer months, which led to the gold price also breaking through the 200-day line to the downside – in addition, the downward crossing of the 100-day line through the 200-day line at the beginning of September was a medium-term technical sell signal. Three weeks later, the price plummeted to almost USD 1800. The massive upward impulse immediately afterwards (no doubt caused in part by the events in the Middle East) quickly overcame both average lines and even managed to break through the USD 2000 mark in October – although the 2009.42 mark has remained insurmountable since then despite several attempts.

The 100-day line has been rising again for six weeks, which is positive. In contrast, the 200-day line has been falling again for two weeks – albeit only minimally, so it can still be considered neutral.

The MACD and stochastic indicator recently generated technical buy signals (blue line crosses red line upwards). However, the stochastic indicator has already risen very high and could be on the verge of a sell signal. The trend confirmator has been holding above the neutral 100 in positive territory for five weeks – after the consolidation, it is already moving upwards again. In the more complex Directional Movement Index, two things are positive: the green line indicates the upward trend direction by crossing the red line and the rising blue line stands for increasing trend strength. The movement has not yet run hot, but the overbought/oversold indicator, with values at 1.0, has already covered half the distance from the neutral midpoint (value 0) to the overbought status (at 2.0), which has already been reached twice.

Whether a fourth attempt is made to reach the top at USD 2069 will depend on whether it manages to break significantly above the gray resistance line. Otherwise, a renewed decline towards the two average lines (approx. USD 1950) is likely.