Gold: a test of $1,600 emerged on the horizon – UOB

Quek Ser Leang from Global Economics & Markets Research at UOB Group noted that a visit to the key $1,600 area would not be surprising.

Key Quotes

“The price actions since late December appears to be similar to those in early June last year when the break of declining trend line resistance resulted in a rapid and sharp rally. While daily RSI is overbought now as in last June, only a breach of the rising trend line support would indicate that gold is ready to take a breather. In other words, further gold strength from here would not be surprising and only a breach of $1,530 would indicate that an interim top is in place”.

“On the upside, the ‘round-number’ resistance of $1,600 is acting as an ‘attraction’. While the next resistance level note above $1,600 is closer to $1,650, the already overbought conditions suggest this level could be out of reach, at least for the next couple of months”.