Following its selloff in 2009 gold established a strong uptrend which has so far taken it on a 166% move from a low of $681 to last week’s high of $1,817.60.
The chart below shows gold’s move up within the long-term trend channel (green lines) and as we can see from gold’s recent bounce (blue circle) the upper trend-line acts as overhead resistance.
The chart also shows the metal’s 150-day moving average (blue line) which as you can see from the red circles has acted as long-term support.
Gold could now fall all the way to its 150-day moving average at around $1,500 and it wouldn’t be anything for the bulls to worry about. In fact a bounce off the 150-day moving average (if we get down there, which I seriously doubt) would represent an excellent buying opportunity.