Gold US dollar closed at $1223.05 rising $32.30 this week. The commodity fell 9 out of last 12 weeks of trading but now has bounced back heavily from the important support levels of $1180 in the 13th week. Gold prices were under pressure from quite some time as the fundamentals were not strong in the recent past and demand being the concern for the drop in prices. But now the situation seems to settle for a while as the demand from Asian countries especially India where Gold is the attraction to the consumers during festive season is expected to surge as is always seen in the past years.
Technically, the price charts of Gold US dollar are trying to convey the message of positive reversal in the prices of the commodity with formation of bullish engulfing on weekly charts. The commodity has bounced third time from the crucial support levels of $1180 and we all know the importance of number 3 in technical analysis. It is in the formation of symmetrical triangle from more than one year the 5th wave of which has not yet completed and is now in progress. This wave is likely to end near the falling trend line resistance of $1325 to $1330 which are expected to accomplish in the coming 2-3 months. The rising Parabolic SAR in daily charts is signalling uptrend to follow in the commodity. Moreover, positive crossover of 8 and 30 EMA (Exponential Moving average) also signals buying on 4 hourly charts which can be assumed to be the first signs of the positive reversal in the commodity. Elliot wave oscillator also shows positive divergence on daily price charts of Gold US dollar.
From all the above explanation, it can be concluded that buying is recommended in the commodity for the coming 2-3 months which targets $1325. The stop losses of $1180 would be advised to maintain in all buy positions.
No comments:
Post a Comment