Gold breaks above $2,700
Just over a week ago, gold was making repeated attempts to break below $2,600. But support held, and overnight it surged through $2,700 to hit another record high. The break-through came in the early hours of this morning during the Asian Pacific session. This tends to be when liquidity is poor, and markets can move dramatically on relatively low volumes. There was a pullback and attempt to retest $2,700 as support early in the European session. But prices held, and it wasn’t long before fresh buying came in to push gold back up again. The big question now is how it will fare once the US opens, and from there, how it closes ahead of the weekend. As mentioned previously, the past week has seen gold behave constructively from a bullish perspective. The gentle decline that took place over the two week’s following the previous record high from late September helped to reset the daily MACD at lower levels. This gave gold a good platform to launch its latest advance. Interestingly, gold’s MACD is still significantly lower than it was three week’s ago. That would suggest that it can maintain its upside momentum. But this is not in itself enough to guarantee further gains. It seems reasonable to expect prices to back up and fill in to provide another base from which gold can rally. Of course, there’s always the danger that a more protracted and deep sell-off develops, so traders should be more mindful than ever of the potential downsides. Meanwhile, silver is making a valiant effort to keep up. But it is still struggling to establish itself above $32 per ounce.
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