GOLD – only a matter of time before $1300 is tested

Why we like the trade - Gold is consolidating following its break above a multi-month channel line and formed a strong uptrend since the August low. The congestion is now taking shape in a consolidation pennant, most visible on the four-hour and daily time frame. A breakout to the topside and a test of $1300 level will evolve quickly, perhaps even going on to test the $1330 to $1345 area. Keep in mind though that $1300 is strong resistance, given the number of inflection points, so it may struggle to break on its first attempt.
On the downside break of the pennant, a break should extend into the $1268 to $1256 area, which coincides with 78.6% Fibo. of the price extension from its lows in August and horizontal support (highlighted by the green shaded zone). In this scenario, we would be leaning into longs here for a wave 5 into $1320.

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