Gold futures completed a successful approach of key level support in Friday's session to hold $1,600 per ounce. The last week of 2011 will likely bring this level into focus as a pivot point to begin the trading year ahead. Autochartist's key level indicator displays the numerous rebounds from this price amidst the recent bouts of selling, which suggests gold may be basing in its current range.
The move higher after printing $1,604 leaves that as the price to watch in Monday's session. Trading volume may be thin during the holiday week, which often exacerbates moves towards or away from pivot points. The short term strength is encouraging for a continuation towards previous resistance at $1,615 per ounce. If this occurs, traders may revert to the developing chart patterns identified by Autochartist on multiple time frames.
A significant break below the $1,604 level would be the first sign of a continued slide for the price of gold, and call into question the market's ability to rally without another retest of major support just above $1,550. Absent that development, the current chart analysis remains mildly bullish with the possibility of range-bound trade to end the year.
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