Weekly chart shows strength
The longer time frame weekly chart (not shown) shows more strength than what is seen on the daily chart. The breakdown from an inside week pattern earlier this week has since turned higher, rising above last week's high of 2,639. If gold is able to close above its highs this week, it will signal renewed strength.
In any case, this week's price trend shows that sellers were in control at the beginning of the week, and buyers have been in control since then. In other words, a failed weekly breakdown occurred. A failed breakdown can accelerate movement in the opposite direction of the initial trigger. It would be worth the money. In any case, a signal indicating further reinforcement is needed.
A rise above 2,665 is bullish
This week's high and short-term uptrend high was 2,665. A rally above that would trigger both a continuation of the trend and a breakout above the weekly candlestick. Note that today's high is just above the two-week weekly high of 2,664. It was another sign of strength. In any case, a decisive rise above 2,665 would trigger a three-week breakout and put gold in a good position to potentially test resistance near December's monthly high of 2,726.
Price may fall below 2,625
On the downside, support at Thursday's intraday low of 2,625 coincides with the two recent daily highs and the top of the internal downtrend line. Thereafter, a small uptrend line connecting the recent swing low at 2,582 and the recent interim swing low at 2,596 indicates potential support. A decisive drop below 2,596 is a dangerous sign for bulls as it indicates that the short-term uptrend has stalled.
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