POTENTIAL GOLD PRICE TO BREAKOUT, UP OR DOWN ?
June 18, 2013
Gold Fundamental.
This week, we are watching closely the US economic data as well as FOMC statement whereby Chairman Bernanke will
speak to send a clear message to the market about Fed decision on tapering. Continues talk on reducing
the current asset purchase programme from $ 85 billion dollars every month have reached a certain level.
Analysts are arguing that the Fed is creating asset bubbles in the US equity market as well as a new housing bubble.
However, the Fed felt that the economy is recovering well and underway but there are clear signs of divisive
Fed officials as pressure mounts to curb the current QE programme. We shall learn more about their decision tomorrow.
Meanwhile, volatility in the market is expected to ratchet higher as we draw closer to the FOMC statement.
Our advice is to have helmets on and trade lightly with a tight stop loss – otherwise stay on the side line.
The short term outlook on gold is biased to the downside as the next minor support comes in at $ 1366
followed by $1355, $ 1338 and $ 1321. After the rejection on a move higher, it opens up more rooms for the bears
to pressure for lower prices. Renewed short selling at or above $ 1400.00 indicate that the area is
a strong resistance and only a break above $ 1424 will enable the bulls to aim for higher prices. In the meantime,
we expect a period of consolidation but with a biased downside potential.
Gold Technical.
After a close at $ 1390.00 area, gold started well in early Asian trading hours holding the same area
but the lack of demand to push prices higher was a disappointment. This indicates that
the market is not ready to break above previous resistance at $ 1395.
Short sellers have strong interest to keep prices below the psychological level of $ 1400 - 1405
and they have successfully done that. The bears remain in control and gold continue to range trade
aimlessly before the release of the FOMC statement. Many traders are either on the side line
or staying nimble. A break pass $ 1373 will trigger lower prices around $ 1366 to $ 1355 area.
The bears are clearly winning and have the intention to revisit $ 1321 level.
However, the previous low at $ 1338 will be a strong support and only if that is given then
we see a potential stop loss trigger scenario that could sent GOLD LOWER.
Resistance: $ 1395, $1409, $ 1423. And Support: $ 1375, $ 1366, $ 1355, $1338
Trader Notes:
Short Term (1 week) : Bearish - Target $ 1361.
Medium Term (1-3 weeks) : Bearish - Target $ 1340
Long Term (1-3 months) : Bearish - Target $ 1280
Gold Fundamental.
This week, we are watching closely the US economic data as well as FOMC statement whereby Chairman Bernanke will
speak to send a clear message to the market about Fed decision on tapering. Continues talk on reducing
the current asset purchase programme from $ 85 billion dollars every month have reached a certain level.
Analysts are arguing that the Fed is creating asset bubbles in the US equity market as well as a new housing bubble.
However, the Fed felt that the economy is recovering well and underway but there are clear signs of divisive
Fed officials as pressure mounts to curb the current QE programme. We shall learn more about their decision tomorrow.
Meanwhile, volatility in the market is expected to ratchet higher as we draw closer to the FOMC statement.
Our advice is to have helmets on and trade lightly with a tight stop loss – otherwise stay on the side line.
The short term outlook on gold is biased to the downside as the next minor support comes in at $ 1366
followed by $1355, $ 1338 and $ 1321. After the rejection on a move higher, it opens up more rooms for the bears
to pressure for lower prices. Renewed short selling at or above $ 1400.00 indicate that the area is
a strong resistance and only a break above $ 1424 will enable the bulls to aim for higher prices. In the meantime,
we expect a period of consolidation but with a biased downside potential.
Gold Technical.
After a close at $ 1390.00 area, gold started well in early Asian trading hours holding the same area
but the lack of demand to push prices higher was a disappointment. This indicates that
the market is not ready to break above previous resistance at $ 1395.
Short sellers have strong interest to keep prices below the psychological level of $ 1400 - 1405
and they have successfully done that. The bears remain in control and gold continue to range trade
aimlessly before the release of the FOMC statement. Many traders are either on the side line
or staying nimble. A break pass $ 1373 will trigger lower prices around $ 1366 to $ 1355 area.
The bears are clearly winning and have the intention to revisit $ 1321 level.
However, the previous low at $ 1338 will be a strong support and only if that is given then
we see a potential stop loss trigger scenario that could sent GOLD LOWER.
Resistance: $ 1395, $1409, $ 1423. And Support: $ 1375, $ 1366, $ 1355, $1338
Trader Notes:
Short Term (1 week) : Bearish - Target $ 1361.
Medium Term (1-3 weeks) : Bearish - Target $ 1340
Long Term (1-3 months) : Bearish - Target $ 1280
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