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.


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