Golden cross by GOLD. Is it time for long?

Gold is up nearly 10 percent this year and might be primed for more gains if a signal tracked by technical analysts triggered Monday is any guide.

A small gain was enough to push the metal's 50-day moving average price above the average price of the last 200 days, forming what's known as a "golden cross" in technical analysis circles. This is seen as a positive signal that demonstrates an asset is outperforming so well in the short-term that it may reverse a longer term downtrend.

Gold futures for June delivery rose 0.62 percent, or $7.80, to settle at $1,261.40 per ounce Monday, adding to its already strong yearly performance. The precious metal is outperforming the S&P 500 index, which is up more than 6.5 percent, as investors hedge against the possibility that the Trump administration does not succeed in pushing through its pro-growth agenda.

Technically, we have a diagonal breakthrough and 50% Fibonacci correction of the long-term downward trend. Price has formed a rising channel since the beginning of the year that takes the lead.

Comment: Currently, the price is not good for purchases because it is in the middle of the channel. For this reason, it's a good idea to wait for a diagonal and horizontal support zone to make the stop possible.

Source: Bloomberg pro terminal

Jr Trader Petar Milanov

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