Gold: Triangle pattern to trigger a significant move

Gold is trading within a narrowing wedge or triangle. According to technical textbooks, this pattern of near-symmetrical lower highs and higher lows implies a significant move is coming once the price of a troy ounce breaks above these barriers, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“XAU/USD is trading above the 100 and 200-day Simple Moving Averages but has failed to break above the 50-day SMA. Momentum is marginal to the upside.” 

“Critical resistance awaits at $1,933, which has capped the price twice in October. A break above this level would free gold of downtrend support and the 50-day SMA. The next level to watch is $1,975. which held the metal down in September. Further above, $1,995 and $2,020 await XAU/USD.”

“Support awaits at $1,898, a support line in mid-October, followed by $1,875, a stepping stone on the way up earlier in the month. The next level to watch is $1,850, the low point in September.”