Gold closed yesterday at the highest levels since mid-May as it convincingly breached $1400. Geopolitical tensions, especially the situation in Syria, are being credited for the surge in demand and could be the catalyst for further advances.
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- The advance from its 6/28 lows of $1180 has reached $1415 which is the 38.2% retracement level of the decline from its 10/5 highs of $1796.
- At this juncture, this is still viewed as a correction as the instrument has been ranging higher within an ascending parallel channel.
- Additionally, it has broken above the descending trendline drawn from 2/7 highs of $1683 and looks poised to test moderate resistance at $1440.
- A breach of this would target a return to the 5/3 highs of $1488 which is also the 50% retracement objective of the decline from the $1796 highs.