Gold has managed to recover from its early January slump which was triggered by uncertainty about the duration of quantitative easing (QE) in the US. Having moved back close to USD 1700/oz, a major test of the current strength and conviction among investors could be tested soon with USD 1710/oz. offering plenty of technical resistance.
A move higher through this level would help steady the market’s nerves, especially among leveraged investors such as hedge funds who have been scaling back net-long positions in recent weeks. Price action is, however, now very much driven by economic data from the US with improved data creating headwinds while weaker does the opposite.
Gold and silver together with the two PGM’s platinum and palladium should however continue to find support as QE is nowhere near its completion, forward inflation expectations stays near recent highs and physical demand from China, especially, should pick up as the economic outlook continues to improve.
As the chart below shows the key support remains the 200-day moving average at USD 1662/oz. while the main resistance area to look out for is USD 1710/oz as mentioned due to trend line and Fibonacci resistance converging on this level.
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Gold Higher But Investor Uncertainties Persist
Published 01/19/2013, 02:59 AM
Updated 05/14/2017, 06:45 AM
Gold Higher But Investor Uncertainties Persist
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