Originally published by AxiTrader
In last week's piece on the outlook for gold in a world of heightened geopolitical risk I highlighted the trendline resistance around the $1288 level dating back to the 2016 high at $1375 was actually a continuation of the line which has its source at the 2011 high of $1920.
That makes it a very important level of resistance.
And it's a level worth watching in the months ahead.
But traders deal mostly in much shorter time frames than the monthly charts I use as a guide. So it's worth noting that on the daily charts gold appears to have had its first foray - and failure - to hold above this line over the past 24 hours.
By no stretch of the imagination does that mean gold prices can't rally.
However, traders cleared bet last night that even though the rhetorical positions of both the US and North Korea remain somewhat belligerent the failed missile launch over the weekend has reduced tensions a little.
I'm not convinced as Pyongyang's comments that it could test missiles weekly last night suggests.
But for now, traders have respected the line and prices have failed initially.
The 4-hour charts suggest a move back toward the $1274/78 region, perhaps $1263/64.
Longer term though I'm still watching how gold ends the month.
Silver broke it's long term trendline 3 months ago and is trying to go higher again this month. Net longs are huge right now - so we'll see.
If both silver and gold break out at the end of April it could be a clear sign that volatility in global markets is about to increase.
Have a great day's trading.