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Gold technical analysis, the uptrend prevails

XAUUSD Tech analysis by Simon Kazinsky on 18:29 December 25, 2019 EST

Gold has stagnated for the past weeks but, as a Christmas gift, it ended the slumber and shot up more than $25/oz in a single day. This pushed the price of an ounce above the upper trendline of the descending flag that had provided a stable price range.

Silver also brought good news and appreciated in sync with the yellow precious metal and broke key resistances, giving more confidence to a new short term bullish cycle for these usually correlated commodities.

Based on previous divergences of price from its supporting moving average in the 4h chart we can set now a mid term target in the $1,750/oz area. A break below $1,400 will put in doubt the bias while if the ounce gets to trade below $1,300 then it will be time to reconsider the positive outlook.

Retail traders are betting on future appreciation of both gold and silver so extra caution is required as this is a reliable contrarian indicator.