A more technical look at the markets from InterTrader
Gold prices scored broad-based gains on Friday, hitting the second biggest monthly gain this year.
This came as gold futures traders interpreted Bernanke’s jaw-boning to be opening the door for more quantitative easing.
The price movement is quite surprising especially when looking at gold’s performance this year.
Starting in May, gold prices have risen on each and every hint of further easing in the US, only to turn negative every time the Fed disappointed.
This time, however, gold rose despite Bernanke’s damp squib,
The move indicates that no matter what the US central bank says, another round of quantitative easing may be inevitable and the typical autumn rally in gold could be very much in motion.
Gold Futures Chart
With the gold spread betting market currently hovering just below the psychologically important level of $1,700, there is plenty of room to the upside, all the way up to February’s highs at $1,783.
Viewing the daily trading chart, we can see the market is trading comfortably above the 200 SMA. Additionally, there is a bullish alignment of the 20 EMA over the 50 EMA which has been in place since the beginning of August.
Taking these into consideration, it looks like there is nothing that could stop the bullish wave.
Short-term pullbacks in the spread betting market could be seen as an opportunity to buy at a cheaper price.
A bearish scenario is hard to imagine as long as the $1,550 support level remains intact with a weekly closing.
Good luck and happy trading
Dafni Sedari, InterTrader
(Original article written 03 September 2012).
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