Gold futures continued to catch a tailwind last week as the fundamental backdrop for the market feeds into a bullish technical chart analysis. The sustained uptrend for the market has found strength from both the geopolitical tensions in the Persian Gulf as well as the European Central Bank's handling of the Greek debt crisis. The risk averse and speculators have joined the ranks of the buy side, and Autochartist has identified the relevant support and resistance zones which may provide direction as the trend accelerates.

The modest retracement seen towards the end of the week falls in line with the advancement of a Channel Up chart pattern seen on the hourly time frame. After successfully pushing to the top of the channel above $1,780 per ounce to set a new multi-month high, lateral drift carried the price across the channel to the key support provided near Friday's closing price near $1,772 per ounce.

This becomes an important level to watch going forward, as gold is now trading well over $200 per ounce over the recent lows. A substantial gain in a short time frame leaves the market susceptible to pullbacks even as the long term rally remains intact. A sell-off from the current level would trigger a downside breakout and project a retracement in the week ahead. This support level has held the price so far however, making it a potential long entry point with a close stop-loss order placed just below the channel support.

A turn higher from the $1,770-$1,775 per ounce range would set the stage for a continuation of the Channel Up chart pattern and an eventual move to another swing high. Such a move would encounter initial resistance at the top of the channel near $1,810 per ounce, with a breakout above the trend line viewed as a strongly bullish outcome. Such a move would invite an impulsive rally to the previous all-time highs above $1,900 per ounce and confirm the gold bull market is alive and well. For further information on this and other Autochartist products, visit our website at www.autochartist.com