Technical analysis of Gold
With the escalating European debt crisis on the one hand and the dollar’s advance on the other, gold prices have been under great pressure since the beginning of May, when the long-term uptrend line was broken. The precious metal started the week flat, as the gains from Greek polls showing the advance of pro-bailout parties were swept away by the strengthening dollar. At 1.576 at the time of writing gold continues its attempts to rebound. The growing concerns about the ailing Spanish bank system and the US consumer sentiment report, that is expected to show a strong figure later today, however make it unlikely for the bulls to take over the control anytime soon. With the MACD holding firmly below zero since mid-March and the RSI failing to stay above 50 since end of February on the daily chart, the outlook for the gold market remains negative. As long as the $1.600 resistance level holds, a break below $1.539 could open the door for further downside movements towards the $1.480 area.
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