Technical Analysis of Gold
After several sessions with no remarkable action in the markets, Wednesday’s fundamentals across the world triggered a heavy sell off across the board. Gold posted its biggest drop in over two and a half months falling from 1.790 to 1.687, after Federal Reserve Chairman painted an improved picture of the situation in the US, dampening expectations for further monetary stimulus that pushed the US Dollar up against all major currencies. On the top of that the upbeat US economic data released yesterday dulled further safe haven demand for the yellow metal. The downward movement found support around the 1690 area, at the 89 SMA on the daily chart. This morning the precious metal is trading up again at 1.720, the 50% Fibonacci level from August’s high to December’s low. Despite yesterday’s drop, the 20 EMA continues to hold above the 50 EMA following the crossover on 25th January. With the US Dollar remaining in a downward channel and the euro gaining back some ground against the greenback, gold could climb back up to 1.762, the 61.8% Fibonacci level. In the alternative scenario, a drop below major support at 1.685 could open the door for 1.628, the 23.6% Fibonacci level.
The comment in this blog is the personal opinion of the contributors and not Intertrader.com. The content does not constitute financial, investment or tax advice. You are advised to discuss your specific requirements with an independent financial adviser prior to entering into any bet. Intertrader.com is not responsible and disclaims any and all liability for the content of comments written by contributors to the blog, and the content of any third party sites linked from this blog.