Richard Perry
Independent Analyst
Gold
Despite the dollar strengthening on Friday, gold held up relatively very well. This bodes well for the near term outlook which has improved in recent sessions and has now posted three consecutive positive candles. Trading above the 38.2% Fibonacci retracement (of $1445/$1702) at $1604 is a gauge that suggests there is a bias towards the 23.6% Fib (around $1642). Despite an early gap lower at the open on Monday, the bulls once more seem happy to support and are pulling gold higher again. Already testing Friday’s high of $1625 is a strong response and closing today above here would show the bulls are ready to push forward again for the 23.6% Fib and test the March high of $1642. Momentum indicators are now picking up positively, with the Stochastics pulling into strong bull configuration, MACD lines moving above neutral and RSI back above 50. There is a good support band now growing around $1595/$1605 early this week as a platform for further recovery gains. Given the positive reaction to the correction to $1562 (an old pivot) the bulls are well-positioned once more. We still see weakness as a chance to buy, but now favour pressure on $1642 and an eventual breakout towards $1702. We remain positive whilst trading above $1562 persists.
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