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Factors aligned for gold's resurgence as price edges up

By Lee Yi Jie

THE last convincing break for gold above the 1,350 level was back in August 2013. Since then, many feeble attempts made by the bulls to break beyond the key psychological level have been futile.

Once again, gold is seen to be flirting with the 1,350 level, bolstered by large bullish momentum towards the start of June 2019. Unlike previous encounters with the key level on the weekly timeframe, a completed cup and handle formation may be observed - this could be interpreted as a springboard, positioned to propel prices beyond the unrelenting ceiling.

The market has since jolted higher and pierced through the 1,350 barrier, even surpassing the upper limits of 1,365 level (2016 high). Various factors lead us to the postulation of a sustained breakout, and the view that the market will continue to stair-step higher.

The first factor for this assumption is the formation of an ascending triangle, which is a trend continuation pattern. This indicates that prices are likely to move in the same direction prior to this formation - upwards. In terms of price action, the pattern is made up of higher lows, demonstrating the growing strength of buyers that accumulates and eventually leads to the forceful move upwards.

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