Technical Analysis of Gold
Gold had a notably volatile session on Friday surging higher near $1630, followed by a move downwards to $1610 to end up basically unchanged at $1.621. This type of price action coupled with a series of higher lows suggests a degree of buying pressure that could be due to the anticipation of either an increase in risk aversion or of a central bank intervention anytime soon. With Friday’s negative nominal GDP print for Japan priming for more printing at a time when the world’s advanced economies have almost become addicted to monetary easing, the safe-haven status of the yellow metal becomes increasingly appealing. The technical set up of an ascending triangle on the daily chart provides further indication that sellers are starting to leave the market allowing the market to continue the upward trend. Key resistance level sits at $1640 with a breakout above that level opening the door for the $1700 area. The bullish outlook on the yellow brick is further supported by the recent bullish alignment of the 20EMA over the 50EMA on the daily chart. Although a bearish scenario is hard to imagine at the moment, only a movement below the $1500 level could change the bullish outlook in the market.
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.