Gold Closes Above Key Resistance During Last Trading Day of 2019

On the final trading day of 2019 gold futures traded to a high $1529. Although gold closed far off of that high, the February contract was able to gain over two dollars on the day and close at $1520.70, gaining $2.10 on the day. Most significantly gold was able to close above the first key resistance level at $1520 per ounce.

This resistance level was created at the beginning of November when after multiple attempts to close above that price point gold broke to the downside as it traded as low as $1446, forming a double bottom in November at that price point. The end of November was unique in that gold began to trade off of that price point to higher ground.

After hitting the yearly high of $1565 at beginning of September, gold pricing could be characterized as having a series of lower highs all the way through the beginning of December. We also saw gold trade with a series of lower lows up until the middle of November. This created a bullish flag formation which would morph into a bullish pennant.

The bullish pennant was formed when gold began to trade with a series of higher lows, as well as lower highs. On November 25 the double bottom was achieved when gold prices slid back down below $1450. Then beginning in December although we continue to see a series of lower highs, gold began to trade with a series of higher lows.

This allowed us to identify the bull pennant formation in which the upper level of resistance was simply plotted from a series of lower highs from September through to December. We also were able to plot a lower level support line from the low created on November 25.

On December 20 gold pricing broke above the upper resistance line which showed the release of energy in the form of a breakout to the upside. This triggered a buy signal for February gold, as this pattern indicated that gold was poised for a strong upside move.

Our technical studies indicate that gold pricing closed just above the first level of resistance is at $1520. The next level of resistance is $20 above that price point at $1540 per ounce. This level is created from the market top achieved at the end of September. Major resistance resides at this year’s record high of $1565.

Our studies also indicate that these three levels of resistance will be taken out by the first quarter of 2020. More importantly we believe that gold will trade above the high created this year. Currently our target is $1623 for gold futures by the first or second quarter of 2020. There is also the possibility that gold could trade as high as $1680 next year.

As we enter this next decade there is much to be thankful for, and much to be excited about. We want to wish all of our followers at Kitco Media, as well as our subscribers at Thegoldforecast.com a blessed 2020 filled with health, happiness, success and wealth, and as always, good trading,