Gold is set for a big move after spending the last 11 trading sessions trading within a relatively narrow ~2% trading range:
Gold (Daily)
The recent range has centered around the $1350 level with support being displayed near $1340 and resistance coming in the low $1360s. Meanwhile, the $1375-$1380 area still represents major resistance. A symmetrical triangle has formed during the last several weeks with price approaching the apex of this triangle.
With realized volatility declining significantly and the RSI(14) touching the median line from above there is a good chance that a breakout from the recent range will take place during the next couple of weeks – energy compression leads to energy expansion. This is a breakout/breakdown that should either take gold prices above $1400 or back below $1300.
The fact that price currently sits above a rising 50-day simple moving average and September is the strongest month of the year historically (an average monthly gain of 2.6% over the last 20 years) offers a good probability that we will be witnessing an upside breakout in gold in the near future:
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