Gold: the importance of the support at $1536 [Video]

Richard Perry Independent Analyst

Gold

Gold continues to consolidate in a near term sideways band between the recent low of $1536 and lower high of $1563. However, when considered alongside what was a very strong session for the dollar on Friday, the performance of gold reflects a growing underlying support forming once again. A positive candle for gold on Friday is being followed by further gains today. Momentum indicators continue to bottom in a way that suggest the recent corrective slide may also now have played out. The Stochastics flattening off around 40, along with the RSI still above 60 is a positive for this outlook. As such the importance of the support at $1536 is growing. We continue to believe that the corrective move back from $1611 would have been an unwinding retracement within a strong medium term outlook. Subsequently the correction is a chance to buy. Support forming around the 38.2% Fib retracement (of $1445/$1610) at $1548 is encouraging too. This level has been a basis of support in recent days. The bulls do though need a move above $1563 to open the upside momentum again. This move is threatening today and a closing breach would be a strong signal for renewed buying pressure. Initial resistance would be $1583 before the $1611 high. For now, there is a still mix of candles on a daily basis and there needs to be patience.

Author

Richard Perry

Independent Analyst

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