Gold Prices Vulernerable as Rally Extends into Resistance

London (Jan 13)  Gold prices are attempting to close out a fifth consecutive week of gains with the precious metal up nearly 0.4% to trade at 1324 heading into the New York open on Friday. The advance comes alongside continued strength in U.S. equity markets and crude prices and although further gains are likely, the immediate advance in gold looks vulnerable heading into next week.

It’s another quiet week for data with the release of the Federal Reserve’s Beige Book and the University of Michigan confidence surveys highlighting the economic docket. Keep in mind it’s a shortened holiday week with U.S equity and bond markets close on Monday in observance of Martin Luther King Jr. Day. 

The focus for gold is on the technical picture with the +7% advance off the December low now eyeing key technical resistance. Interestingly enough, a similar setup exists in oil prices and if the current interpretation is correct, we’ll be looking for a possible exhaustion trade early in the session.

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