Gold is exhibiting an untidy uptrend in price with the potential to breakout above the critical long-term resistance level near $1,364 and move toward $1,550.
It's the untidy nature of the uptrend, and the lack of confirmation from related commodities, that calls for more caution in trading gold.
The uptrend that started around December 2016 has not been a steady or well-defined trend. On the weekly chart, the Guppy Multiple Moving Average indicator relationships show a weak uptrend. It's weak because the gold price oscillates dramatically around the long-term GMMA. This is whipsaw activity taking place against the background of a slowly rising trend.
The long-term GMMA provides an insight into the way investors are thinking: When it is compressed, it suggests weak investor support. Strong investor support for a trend is shown by wide and steady separation in the long-term GMMA. That characteristic has only developed in the past three months. The separation is not very wide and that suggests there is not strong investor support for the rising trend.
The second feature that contributes to the weakness of the trend behavior is the placement of the uptrend line. This starts from the low of December 2016, but the second anchor point for the uptrend line does not appear until January 2017. That means the position of the trend line is not well tested and that, in turn, means the uptrend is not well defined. The current value of the uptrend line is near $1,305 and that is also near to the value of the lower edge of the long-term trend line.