iiTrader Founder & Chief Market Strategist Rich Ilczyszyn reveals key levels he's watching during Thursday's session to determine whether or not gold is trying to make a bullish breakout.
Gold pulled back to hold a higher low at $1676.2 Wednesday night as the market chopped around.
Today, gold must move through the $1684.9 highs, which is also where a secondary trend line sits. After hitting this wall all week, futures and commodities traders will start to get jittery and look to exit longs or outright sell without a further move higher.
Still, a close above $1688 and furthermore $1696-$1698 is needed to signal a bullish breakout in gold.
Pullbacks below last night's $1676.2 and furthermore, Wednesday's $1673, will be discouraging – but only a close below the 200-day moving average at $1667 will likely cause further liquidation.
Still, a bearish reversal signaling a move to $1600 only comes into play with a close below $1642.6-$1641. A continued close above $1678-$1681 is needed to maintain momentum.
So what's my trade?
I am getting long a breakout above $1684.9, and I will stay in the position as long as we stay above $1680. My target is just above $1700.