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Upside levels are in focus for gold

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(Kitco News) - Gold technicals are breaking higher this morning meaning some upside levels could be in focus. On Monday, the 200-period simple moving average has been taken out along with the orange internal trendline marked on the daily chart below. These are significant technical zones in the short-medium term. Now the purple longer-term trendline could come into play along with the green horizontal area near $1840/oz.

If these aforementioned resistance zones break it could be game on for the yellow metal. Some inflation measures (especially Europe) are pointing to inflation being an issue for longer than the market originally expected. This could see the yellow metal outperform as it has been used historically as an inflation hedge. U.S. Federal Reserve Chair Powell also recently said that tapering should be the option before raising rates and that could be good news for the gold bugs as recent moves higher in rates have sent gold falling.

Looking at the market profile the price is now holding above the volume point of control at the red horizontal line. If there is to be a retracement this could be the first support. Also, the price could come back to retest the trendline (orange) that has just been broken. For now, resistance levels need to be taken note of as if this is just an over-exuberant move higher where might the sellers come back in.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.