The precious metal may be up a little over 2% on the week thus far but the technical picture remains the same. The move higher yesterday saw gold touch a high of $4,173 before falling back slightly now to $4,157 on the day. On the daily chart, it is still clear that price action is keeping within the flag/wedge pattern that we're seeing since the middle of November.
And as mentioned earlier in the week:
"There is a flag/wedge/pennant building for gold this month and price action continues to hold within the confines of that as seen above. As such, that technical pattern is now going to act as a key momentum factor in determining the next big move for gold.
A breakout from the chokehold and above $4,200 will open the floodgates for gold to target the highs for the year again. The momentum will have added credence considering the strong seasonal months in December and January for the precious metal typically.
Meanwhile, a downside break will quickly see the $4,000 mark get called into question before revisiting the late October lows near $3,900. That will be a crucial support level to watch as a break there opens up the path back towards a potential test of the 100-day moving average (red line) just above $3,700 currently.
So while the fundamental drivers are still very much a consideration for gold price action, the technical posturing above suggests that the charts will be the ones in deciding the directional pace of the game for the next move."
There is no change to that sentiment as of today as well.
