Gold Is Approaching A Critical Technical Level That Will Determine Its 2017 Fate

Share This Article
January 20, 2017 7:34am NYSE:GLD


From Taki Tsaklanos: The price of gold is up 6.1 percent year-to-date. In doing so, it is one of the outperforming assets in the first three weeks of the year.

However, the recent rise in the price of gold has the lookings of a ‘relief rally’. As the short to medium term chart on the daily timeframe shows (see first chart below) the gold price recovered after a strong decline of 20 percent which started early November.

Visibly, former support is now resistance (see red horizontal line on the first chart). In other words, the daily chart shows the importance of $1220 gold. A firm move higher would suggest strong buying, and bullish tactical momentum.

gold 1220 USD

InvestingHaven’s research team notes that the $1220 level is not only important on the medium timeframe but also on the long term. Below chart is the weekly on a 5-year horizon. As seen, gold remains in a falling channel. Such a pattern is typical in a bear market, and it is certainly a characteristic when gold is in a bear market. Interestingly, one of the falling trend lines shows resistance exactly at $1220.

Moreover, the weekly chart shows that a failure of gold to move ‘structurally’ above $1220 could result in a retest of the lower area’s of the falling channel.

Both the medium and long term chart suggest that $1220 gold has a high level of importance.

gold price chart

Fundamental factors could be in favor of gold, but for the time being investors have decided to continue with gold’s bear market.

Typically, gold gets a bid in times of inflation or fear (panic) in markets. None of both conditions are met at this point, until proven otherwise of course. So long, the 2017 gold price forecast remains the same.

The SPDR Gold Trust ETF (NYSE:GLD) fell $0.29 (-0.25%) in premarket trading Friday. Year-to-date, the largest ETF tied to gold prices has gained 4.71%, versus a 1.06% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #2 of 29 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of Investing Haven.

Read Next

Get Free Updates

Join over 50,000 investors who get the latest news from!

Most Popular

From Our Partners

Explore More from

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again! respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories