HardAssetsInvestor

Written by Sumit Roy  |

January 10, 2012

Precious Metals Monitor: Gold On Cusp Of Upside Breakout

Details

As dollar correlation breaks down, gold is testing initial resistance.

It’s been a bullish start to 2012 for gold, as the yellow metal continues to rally swiftly off the lows set late last year. As of this writing, prices were last trading near $1636/oz, which is close to the first level of resistance the metal faces at $1642.

From the perspective of technical analysis, it looks increasingly likely that gold put in a double bottom at $1532 in December, but a decisive break of $1642 will be required for confirmation.

An upside breakout bodes well for a continuation of gold’s 11-year bull run and an eventual retest of the metal’s record high above $1921.

Meanwhile, silver has been following gold in lock step. Prices retested support at $26 late last year before bouncing aggressively to last trade just above $30, where the first level of resistance lies.