Gold poised to move higher under cloud of geopolitical uncertainty

AMID turmoil in the geopolitical climate, gold took centre stage as a safe-haven currency, having an extremely bullish run for most part of the year, reaching a high above the price point of 1,550. It peaked out at the start of September and started trending downwards mildly with lower highs and lower lows. This begets the question: "Did the bulls run out of steam or is the move merely a phase of consolidation priming for a move higher?" Various signs seem to indicate that gold is poised for an uptick in the near term.

The first distinct factor is the formation of a bullish flag pattern on the daily timeframe, characterised by a price spike upwards known as the "Pole" (May to September), followed by a smaller pullback known as the "Flag" (September to November). The flag pattern is identified as a continuation pattern which means upon the completion of the pattern, prices will continue their move in the direction of the overriding trend. In the case of a bullish flag pattern, prices are likely to edge higher.

At present, gold is resting at the 1,464.35 level after having rebounded from the lower band of the flag formation. The lower band of the pattern serves as a respected dynamic resistance. On two previous occasions when price approached its levels, rejection occurred and prices reversed higher. Coupled with that, the appearance of a hammer candlestick pattern that resided on the support level before prices rebounded further proves that a bullish move is imminent.