Gold price, time for bullish continuation?

Gold prices have been under pressure since the all-time high last year. The price slowly prints lower closing on the monthly basis. However, there is small evidence that the current bearish correction might be nearing the end. Inflation fear starts to emerge globally which could lead traders and investors into gold to hedge against inflation.

Traders will monitor closely the central bank’s actions across the world this year. Rising treasury yield and interest rate could become the major indicators for gold next bull run.

New Month

Monthly Chart

Gold’s long-term trend continues trading to the bullish side. However, the price continues making bearish close each month. The recent bearish close brought the price down below the trendline. There is hope that the trend will change this month as gold currently trading above the previous month’s high.

If the bullish pressure persists then gold prices might continue trading upward but are limited near the trendline. On the other hand, if the bullish pressure reverse then gold could fall to as low as $1,500 – $1,550 area.

Weekly Chart

The gold weekly chart shows a possible flip of support – resistance. The level will become a resistance level to watch this week. If the price gets rejected with strong bearish momentum then we might see a bearish continuation toward the bottom trendline.

Daily Chart

The gold situation on the daily chart seems mixed. The price might have formed a double bottom pattern in the previous downturn. However, it has not left the bearish channel shown on the daily chart. Traders will observe the price reaction at the top of the channel.

We might have a bullish breakout from the top of the channel. Alternatively, we might see a downturn again to test the horizontal line level before the price continues moving bullishly.

Trade Plan

The situation on gold seems mixed between all three charts. We have a bullish trend on the long-term chart and currently, the price is in a bearish correction. On the daily chart, the situation continues to be bearish but there is a bullish development.

Traders could plan for long positions in gold while monitoring for a breakout from the bearish channel on the daily chart.