GOLD Technical Updates 20-Oct-2011

Commodities Market: Technical Outlook

 October 20, 2011

R2=1674.20

R1=1657.85

PP=1648.69

S1=1632.33

S2=1623.18

Gold continued with its declining movement and lost 21.19$ to close at 1642.38$. Currently, gold has fallen below the 14-DMA indicating that the downward trend is likely to continue. If the decline extends further, the likely target will be at the 200-DMA standing at 1586$, however, any upward retracement will be restricted by the 14-DMA at 1658$. Further, the RSI has continued to move down and the MACD has now taken a downturn indicating lower price movement is possible in the near term. It is suggested to ‘Sell’, keeping stoploss above the 14-DMA. The support and resistance are present at 1615.94$ and 1657.81$, respectively.

Fundamental:
Gold struggled to recover from the previous session's losses on Thursday, as mounting doubt over whether the euro zone will be able to produce a concrete plan to tackle its debt crisis and a weak U.S. economic outlook weighed on market sentiment. Traditionally gold is looked upon as a safe-haven asset, but a cloudy global economic outlook has taken the shine off bullion as its prices track moves of riskier assets, including equities and other commodities.

By

M.Zohaib Gadit

Forex Trading Consultant