Technical Analysis - Gold - Looking to break out in near term

Legend: UTL = uptrend line

DTL = downtrend line

BB = Bollinger band

DMA = daily moving average

Gold closed positively on Friday but has been unable to continue higher this morning.
Gold has pierced below the 7 DMA and the 21 DMA.
The stochastics are attempting to cross lower, while the RSI is neutral.
The BBs are converging again, suggesting a forthcoming breakout.
Gold has support from the 50% Fibonacci retracement level at $1,656 from the December 2011 low to the February 29, 2012 high.
The metal is trading in a short-term triangle formation at $1,648-1,691 and is above an old down channel at $1,666-1,573.

We are still neutral while gold trades in a small symmetrical triangle formation.
We will either turn negative on a break and close below $1,655-$1,556-$1,648 (UTL/50% Fibo/UTL) and leave a turn-neutral trigger around these levels, citing $1,635-$1,630-$1,624-$1,611 as our downside targets.
Otherwise, we could turn positive and on a close above $1,666 tonight as long as the stochastics do not follow through and sustain the present bearish cross.
We are therefore neutral in the short-to-medium term but expect this to change in the coming week as gold looks to break out. Confirmation of this breakout will be seen in the BBs.
We are neutral-positive in the long term while gold continues to trade in this large triangle formation.

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