Gold: Bull breakout confirmed on Syria crisis
- The Syrian issue seems to have triggered a flight to safety.
- The gold daily chart shows HOwevera bull flag breakout - a bullish continuation pattern.
Gold retreated from the 11-week high of $1,365 after the Fed minutes boosted the expectation of faster rate hikes, but managed to secure a bullish technical breakout.
The metal closed yesterday at $1,353, signaling a bull flag breakout, meaning the rally from the December low of $1236.50 has resumed. According to the measured height method, the yellow metal could rally to $1,466 over the next couple of months.
As of writing, the yellow metal is changing hands at $1,352. Prices had risen as high as $1,365 yesterday after Trump tweeted "missiles are coming to Syria" and criticized Russia for backing the Assad regime, triggering a flight to safety. Further, Saudi Arabia said its air defense forces intercepted three ballistic missiles fired at Riyadh and other cities by Yemen's Houthis.
The metal could revisit and possibly break above the previous day's high of $1,365 if the geopolitical risks yield heavy losses in the stock markets.
Gold Technical Levels
A break above $1,356.91 (March 27 high) could yield a re-test of $1,365 (previous day's high). A violation there would expose resistance lined up at $1,375 (2016 high). On the downside, acceptance below $1,348 (April 4 high) would signal bullish invalidation and may allow a pullback to $1,331 (ascending 50-day moving average) and $1,324 (Jan. 18 low).
