Gold trades up to above $1,870, its highest since 14 June
There was a bit of a pause in the breakout momentum around $1,868 over the past few sessions but buyers kept the faith, and we're seeing an extension to the upside push towards $1,870 levels at the moment.
From a technical perspective, there isn't much to dislike when it comes to the latest breakout in gold as it follows months of consolidation.
The release is like letting out a huge sigh of relief and it is favouring buyers with little standing in the way of a nudge towards $1,900 perhaps. Further resistance is then seen at the May to June highs around $1,912-16.
Two other positive things working in favour for gold right now is that the rise here comes against the backdrop of a stronger dollar, and also as markets are betting on rate hikes.
On the latter though, real yields are still keeping near all-time lows so perhaps that is one thing that is still supportive of gold at least.
But I would argue that the technical release/breakout is the dominant factor right now for gold even if there might be scope for a pullback before we get to the next potential push coming from the seasonal tailwind in December and January.
However, for now at least, buyers are in a good spot and there isn't much to argue against a potential extension towards $1,900 with little-to-no resistance in between.
