If we look at the chart we can see that gold entered a key trading range of between $1,360 and $1,365 over the last month but failed to remain there and since entering this zone 5 days ago it has been sharply rejected and has lost around $40 in value.
In September of last year the beginning of this range was also a strong resistance point where gold was sharply rejected so this level becomes even more critical.
Looking forward, the price needs to reverse and trade back within the key price channel that has formed on the chart and from there a support level can develop where gold can finally break the $1,365 level.
“Traders are watching to see if gold can break through the key technical resistance at $1,365. This resistance area has contained rallies in gold on five separate occasions. If gold breaks above $1,400 that would set the stage for a powerful rally in the months ahead,” said Ken Ford, president of Warwick Valley Financial Advisors.
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