Gold and silver have been trading sideways for most of 2012, but these precious metals may make higher prices their New Year’s resolutions.
Although this market has been choppy and range-bound, gold appears to be poised for a possible breakout to the upside.
Gold (December) issued a buy signal on the daily chart Friday (11/23) following a buy signal last Monday (11/19), which was gold’s first buy signal since the trend changed to the upside.
Gold is now super-trending to the upside and has closed above major resistance areas on the daily chart, which now acts as support. I define a super-trend as any market that trends above its nine-period simple moving average (SMA).
Gold Daily Chart
The trend remains up on the weekly chart and gold has little resistance overhead. Taking a look at gold’s weekly chart, you can see that gold has been stuck in a range for some time, and if gold takes out its September highs of around $1800, I feel that gold may move considerably higher.
Gold Weekly Chart
Gold prices, as seen on the monthly chart, have basically been locked in sideways movement since August 2011. The trend remains to the upside on the monthly chart. For gold to break out of its range on the weekly chart, it also needs to close above $1800.
If gold does indeed take out the $1800 level, it’ll generate a buy signal on the monthly chart, which suggests that gold has a way to go to the upside.