Gold Breaks Out. And This Chart Proves Technical Analysis Simplicity Still Works
Gold Futures (COMEX: GC1!) just broke out above a key descending resistance line — and in doing so, delivered a reminder that technical analysis doesn’t need to be complex to be effective.
A single trendline on the 12-hour chart tells the story. After months of sideways action, price pushed above the $3450 level, which had acted as a ceiling since mid-April. The breakout, now holding above $3458, signals a potential momentum shift to the upside.
This is a textbook example of how simple chart structures, even without a stack of indicators, can reflect what’s really happening in the market. Gold is bullish, and this chart speaks for itself. No indicators, no complexities. 1 chart, 1 line. That’s it. Does it show you what is happening (bulls or bears in control? Yes, it does).
Okay, Cool, But How Do Traders Join This Move?
Okay, so after we saw that technical analysis sumplicity can work in supporting what we see is happening (gold bulls in control and probably going higher after breaking out up), some of you may be wondering, “Now that the breakout has happened, how do I enter?” The honest answer: usually not now.
Once a breakout is publicly mentioned, whether in this article, within most social media groups, or by another gold technical analyst or trader, it’s often too late for an optimal entry. Chasing can lead to poor risk-reward setups. Instead, the more disciplined strategy is to wait for a retracement on a lower timeframe, ideally toward a zone of confluence or minor liquidity.
As price of gold futures is currently at $3467, let’s take a look at three key levels that may offer better entry opportunities for bulls (this extenstion is a part which is less simple and not seen in the above chart):
1. $3453.2
This level aligns with the third upper standard deviation of today’s VWAP and has shown some liquidity interest. It’s not guaranteed to be reached, but it’s a spot where more sophisticated traders may be looking for an entry — especially if price dips briefly and holds.
2. $3450.9
Very close to the semi-round number of $3450, this level also matches the third upper deviation of the August 4th VWAP. It carries both psychological and technical weight.
3. $3457.3
This is tied to the third upper standard deviation of the August 5th VWAP. A retracement to this level could offer bulls a short-term entry with a tighter stop — depending on how price reacts.
It’s worth noting that all of these levels are derived from VWAP standard deviations, and that makes sense. In the three-and-a-half days leading up to this breakout, gold had been consolidating in a fairly horizontal range. These VWAP-based levels reflect recent accumulation zones that may now act as support.
How to Approach the Entry to the Possible Gold Long (there are no promises you will catch it)
Since we can’t know in advance which, if any, of these levels will trigger a bounce, one tactic to consider is this:
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Set limit buy orders at each of these levels ($3457.3, $3453.2, and $3450.9).
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Position size accordingly to average into the trade if multiple entries are hit.
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Set a stop-loss slightly below all three, depending on your risk tolerance.
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Understand that none of the orders may fill, and price may simply keep going without you. That’s the trade-off for better entries.
Partial Profit-Taking Strategy for Previous Gold Longs (Important)
If you’re already long — or if some of those entry orders get filled — then $3473 to $3475, or even up to $3480, is a logical zone for partial profit-taking.
These levels aren’t visually obvious on the current 12h chart, but they’re drawn from value area and VWAP data dating back to the fourth week of July. It’s a strong potential area for price to pause or stall, at least temporarily.
At that point, traders can consider taking half off the table, moving stops to entry, and aiming for a more extended target near the $3500 round number. That kind of strategy is consistent with many of the tradeCompass methodology and discretionary tactics used in our Telegram group. Informed traders and investors do visit investingLive.com (formerly ForexLive.com) for additional, original views. Like when our orderFlow Intel showed this early bullish drive buildiing up early in gold, 3 days ago.
The Recent Gold Breakout is Backed by Ongoing Bullishness for Gold
The breakout above $3450 is meaningful, and it’s backed by impressive recent performance:
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3.49% over the last week
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30.39% year-to-date
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41.56% over the last 12 months
Gold continues to benefit from macro tailwinds like Fed easing expectations and safe-haven demand, as well as Trump trarrif volatility
But as always, and especially when trading volatile instruments like gold, any entry should be planned carefully. Risk is real, and there are no guarantees. Whether you wait for a retracement or manage an open long position, trade gold at your own risk.
This article was written by Itai Levitan at investinglive.com.