Gold has climbed to resistance near $4,400 after rebounding from a $3,900-$4,100 range, with a commodities analysis on Investing.com pointing to a $4,900-$5,000 target as oil jumps and mining stocks outrun the metal. The same report flags CPI and PPI inflation data due later this week as a potential short-term swing factor.
Gold has arrived at both horizontal and trendline resistance in the $4,400 zone, with its stochastics indicator turning overbought, according to a commodities analysis published on Investing.com. The move follows a rebound from a $4,100-$3,900 buy zone the analysis had flagged before the recent lows.
Oil's jump coincides with gold's rise
Oil surged $4 per barrel the day before publication, and gold rose alongside it, the analysis said. It points to a bull wedge breakout in oil and a base pattern in gold. The base pattern's target zone sits at $4,900-$5,000.
Debt and a shrinking reserve underpin the case
The analysis also points to a declining US Strategic Petroleum Reserve and rising government debt as pressures it says can't be resolved with rate decisions alone. It ties the backdrop to the Canadian Venture (CDNX) index, where a bull wedge pattern and its MACD reading suggest a breakout may be near.
Miners outrun the metal
Gold mining stocks are up 20%-50% from the $4,100-$3,900 buy zone, the analysis said. The GDX exchange-traded fund has separately surged about 28% in just a few weeks. Stochastics and RSI on GDX's daily chart are now overbought, prompting partial profit-taking on positions bought near the lows. On the weekly chart, however, the analysis notes the senior miners still have room to run, pointing to a stochastics crossover buy signal and a surging MACD histogram.
Inflation data due this week
The analysis also points to this week's inflation data as a possible source of short-term swings in metals. CPI and PPI reports are due later this week, and the analysis expects any resulting dip in gold or silver to be likely short-lived.
Source: Investing.com
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