Gold pulls back from six-month high
James Chen March 18, 2014 7:21 PM
<p>Gold (daily chart shown below) has declined for the second day after having hit a six-month high around 1392 early in the trading week. This […]</p>
Gold (daily chart shown below) has declined for the second day after having hit a six-month high around 1392 early in the trading week.
This high is the year-to-date culmination of a strong bullish rebound from the double-bottom, multi-year low around 1180 that was hit at the very end of 2013.
The sharp and consistent rise that has taken place since the beginning of 2014 has been virtually uninterrupted, steadily breaking out above key resistance levels and moving averages.
Having emerged in early March above a major downtrend resistance line that has defined the bearish trend since the October 2012 1800-area high, gold has continued to show marked bullish momentum and follow-through.
On hitting the noted 1392 high earlier in the week, a tentative moving average cross of the 50-day moving average above the 200-day moving average has occurred.
This potentially bullish indication has not been seen since 2012, and provides an additional suggestion that gold bottomed out in 2013.
In the event of a further pullback from the 1392 high, major support resides around the 1320-1325 price zone.
To the upside, a likely scenario for a resumption of the recent bullish trend would see the precious metal target key upside resistance around the 1425 level, last hit in August, which represents the peak of the noted double-bottom pattern.
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.