Gold: Expect weakness to be seen as an opportunity [Video]

Gold

The gold buyers may have lost the momentum of their bull run, but we continue to expect weakness to be seen as an opportunity. The retracement has become rather choppy in the past 48 hours, but there is a basis of support around the 23.6% Fibonacci level (of $1445/$1688) around $1631. To yesterday’s low, the unwind has been $63 from the high (becoming comparable to the $75 unwind in January). It seems as though there is still an appetite to buy gold, judging by the overnight rebound once more, which has supported the market at $1625. There is still plenty of room for the unwinding move to continue though, with the key breakout at $1611 now a basis of support, and the support of a 10 week uptrend at $1585 today. We remain positive on gold on a medium term basis and see near term weakness as a chance to buy. The hourly chart shows a little more of a range play has formed in the past couple of days, with support $1625/$1628 and resistance around $1658/$1662. Whilst this range is in place, we are now neutral but are looking for a breakout to signal renewed buying pressure.