Global bond sell-off prevailed over Gold - SocGen
Research Team at Societe Generale, suggests that after completing a 5-wave up cycle (according to Elliott Wave Principles) at $1375 last July, just shy of the 38.2% retracement of the 2011 to 2016 down trend, Gold has embarked on an intermediate correction which accelerated following the confirmation of a Head and Shoulder pattern below $1250/1255.
Key Quotes
“Gold proved unable to stabilize above the multi-month graphical levels of $1207/1200, also the 50% retracement of the whole up move. It is heading towards the interception of crucial supports at $1172, the 61.8% retracement and more significantly the upper bound of the multiyear down sloping channel. Weekly Stochastic indicator is now probing a 3-year floor suggesting $1172 will be a key. In case this gives way, Gold would re-integrate within the multiyear channel and this would indicate the possibility of a deeper and prolonged down move towards $1125/$1100, the 76.4% retracement level and the projected potential for the H&S pattern, with intermittent targets at $1154 and $1138.”
“Short term, $1200/$1207 will be an immediate hurdle.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
