Gold Trend! 27-09-2011
September 27, 2011
Technical View
R2=1736.17
R1=1677.44
PP=1605.02
S1=1546.30
S2=1473.87
Yesterday, gold after testing the 200-DMA support recovered to close at 1618.04$. Currently, gold is likely to face the resistance of the 100-DMA standing at 1663.98$; any rise above this level will open the way towards 1681$, however, any failure would drag it down to re-test support at the 200-DMA standing at 1558.78$. The indicators are mixed suggesting a neutral view,If gold again break $1608 level then we may see it towards $1558/50 and $1475 level. It would be still risky to buy gold around $1626 level. Gold may make its buying after $1650 and then go till $1683 and $1741.The support and resistance are present at 1573.86$ and 1663.98$, respectively.
Fundamental View
The recent high volatility continued on Monday morning as the Gold Price hit an eleven-week low of $1537 per ounce during Asian trading - a 7.2% drop from Friday's close - after Gold Futures exchanges in Shanghai and New York announced margin hikes for leveraged traders. "There is a big Dollar buying frenzy now, which is dragging everything down and people have to liquidate just like 2008”. In October 2008 - a month after Lehman Brothers collapsed - gold fell more than 12% in a week, based on PM London Fix prices, while stock markets also saw heavy selling. Yesterday morning's spot market fall to $1537 represents a 15.2% drop from the start of trading last week. Gold futures advanced for the 1st time in five days as the biggest three day drop since 1983 encouraged purchases by investors seeking a store of value amid turmoil in global financial markets. The European Central bank is likely to debate restarting covered bond purchased and may discuss interest rate cuts to ease undying strains.
By
M.Zohaib Gadit
Forex Trading Consultant
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