Gold begins tentative recovery

<p>Gold (daily chart shown below) has begun a tentative recovery within the past week that has pushed the precious metal back up to its 50-day […]</p>

Gold (daily chart shown below) has begun a tentative recovery within the past week that has pushed the precious metal back up to its 50-day moving average.

This occurs after a plunge during the latter half of March that brought the price of gold down sharply from its six-month high of 1392 in mid-March to hit a low of 1277 at the very beginning of April.

That low represented a decline of more than 50% of the bullish trend that dominated the first three-and-a-half months of 2014, which had previously brought gold up from a double-bottom, multi-year low at around 1180 at the very end of 2013.

 
Gold Technical Analysis chart 10.04.14

 

When the noted high of 1392 was reached more than three weeks ago, the 50-day moving average made a conspicuous cross above the 200-day moving average, a bullish indication that had not been seen since late 2012.

With the current recovery of gold from its 50% pullback tentatively in place, the technical bias remains to the upside after the precious metal potentially bottomed out in 2013.

Further upside momentum that breaks out significantly above the 50-day moving average should continue to target major upside resistance at the key 1425 area.

Downside support currently continues to reside around the major 1265 support level.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.