A more technical look at the markets from InterTrader
The gold spread betting market had a notably volatile session on Friday surging higher near $1,630, followed by a move downwards to $1,610 to end up basically unchanged at $1,621.
This type of price action coupled with a series of higher-lows suggests a degree of buying pressure. This pressure could be due to the anticipation of either an increase in risk aversion or of a central bank intervention anytime soon.
The safe-haven status of the metal is increasingly appealing given Friday’s nominal GDP for Japan which could lead to more printing. This comes at a time when the world’s advanced economies have almost become addicted to monetary easing.
Gold Analysis: Candlestick Chart
The technical set up of an ascending triangle on the daily chart provides further indication that sellers are starting to leave, allowing the gold futures market to continue the upward trend.
Key resistance level sits at $1,640 with a breakout above that level opening the door for the $1,700 area.
The bullish outlook on the yellow brick is further supported by the recent bullish alignment of the 20 EMA over the 50 EMA on the daily chart.
Although a bearish scenario is hard to imagine at the moment, only a movement below the $1,500 level could change the bullish outlook in the market.
Click here for further gold technical analysis.
Good luck and happy trading
Dafni Sedari, InterTrader
(Original article written 13 August 2012).
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