Bias has turned more bullish but upside break remains limited
As the dollar continues to hold weaker, one of the bigger beneficiaries in all of this has been gold. Price managed to break above the 200-day MA (blue line) last week, indicating that the price bias and momentum has turned more bullish.
However, since then the upside move has been limited by daily resistance from the 50.0 retracement level @ $1,262.80. That remains the key ceiling for gold as markets looks to wrap up the year.
With the Fed shifting to a more dovish tone, perhaps it's about time gold starts recapturing the market's imagination as a bet against the dollar but also as a traditional safe haven once again as it did in the past.
As the fundamental landscape starts to turn brighter for gold, the technical indicators also are looking better with the key break above the 200-day MA for the first time in seven months. Couple that with a strong seasonal trend to start the year (I'll let Adam get into this in due time but gold's best-performing months has been January and February; more so the former), it sure looks like bullion is heading for its big break.
However, with liquidity conditions very much tied down this week, it may have to wait a while longer. Although, thin liquidity can also exacerbate price moves so be on the look out for this in case.
