It was mid-November that gold fell through $1250. As seen on the chart below, the $1250 level is one of those few very important price points. It was former support, in particular early October last year as well as in the March to May period.
Former support becomes resistance. So investors are watching very closely where the gold price will go from here. If gold remains above today’s price level for at least 3 days, it will be a tactical breakout. However, if gold fails to trade consistently above $1250 for at least consecutive days next week, resistance could be too strong.
InvestingHaven’s research show that the gold price forecast for 2017 is bearish for the first period of the year. Although a break above $1250 is an option, the real breakout point is $1350. That is where the long term bear market will turn into a bull market. So that is, for the coming few months, by far the most important price level to watch.
Interestingly, gold miners were not very strong this week. The GDX ETF dipped to 23.90 earlier this week, and closed with a small gain of 0.84 percent today. Gold miners are not leading at this point, which could be a leading indicator of gold’s impending pullback.
Silver did not lead neither, as the gray metal gained 1.18 percent on Thursday.
The SPDR Gold Trust ETF (NYSE:GLD) rose $0.81 (+0.68%) in premarket trading Friday. Year-to-date, GLD has gained 8.51%, versus a 5.78% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Investing Haven.