With the Dow hitting a new all-time high record, gold trading remains capped in a tight range of $ 1570 to $ 1585. It initially traded higher on the back of a “Global Stimulus” programme by central banks, as well as a lower US dollar index. Prices are capped to the upside and unable to break that 38.2% retracement level. This confirms that the bear is still in control. We expect prices to consolidate - a retest of quality support seems imminent.
Gold is still trading at the bottom end of the downtrend channel line. It is a major concern as it fails to have any traction to rebound from this area. Instead, it is still consolidating after the bear flag. Should prices break below $ 1570, selling pressure will increase and a retest of $ 1550 is possible.
We will short gold at $ 1568.5 with a stop loss at $ 1572.5 and target $ 1556. Should selling overextend, we will look to place a buy at $ 1530 with stop loss of $ 1525 and target $ 1550.
Resistance: $ 1587, $ 1592, $ 1625 (50%), $ 1650, $ 1686, $ 1697 (previous high) Support: $ 1564, $1555, $ 1545, $ 1525, $ 1522 (2012 low).
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Gold: The Bear Is Still In Control
Published 03/06/2013, 05:29 AM
Updated 05/14/2017, 06:45 AM
Gold: The Bear Is Still In Control
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