FxWirePro: Bulls be cautious as gold approaches key resistance

Gold bulls who have been enjoying five consecutive weekly bull run since early December, should be cautious and keep close monitoring as the yellow metal approaches a key resistance. The yellow metal is currently trading at 1333 per troy ounce, down this week for the first time after five-weeks run on risk aversion and mainly a weaker dollar. The accompanying chart shows that gold is now heading to test key $1340 area, a resistance that has not been broken since 2013.

In the past five years, gold bulls have tested the resistance five times and with no success. The latest test took place in September and a failure to break the resistance pushed the gold price to as low as $1240 per troy ounce. Another failure to break could push the price to test long-term rising support line $1190-1200 area.

We would once again urge our readers to use caution when going long in gold.