The advance of gold continues as the price action stays above the two year weekly channel that was breached for the first time a few weeks back. When this kind of event happens, technical analysts wait and see if what was formerly a line of price resistance becomes a line of price support. In the case of gold, that line has mostly held as the weekly closes have stayed above it. The current sideways action should break out to newer highs based on the next chart below, but expect a retest of the weekly channel line at $1,200 after this.

That chart is the 4 hour price action which shows a clear triangle in progress since the recent peak of $1263. Given the RSI for daily gold is at 66, there is room for gold to go higher and push the RSI into the overbought territory whilst breaching this triangle to the upside and making new highs. After this and as said above, gold could dip back into this triangle but hopefully hold above the weekly line.

The situation for silver is more delicate as it has yet to catch gold's fire (as shown by the rising gold-silver ratio). Subscribers have been posted this information in our regular weekend update.

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