Gold Finds Supports on Chinese Demand

Gold Finds Supports on Chinese Demand

By: Ben Myers | YesOption | On:8-10-2014 08:03
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Daily chart for Gold

Daily chart for Gold

 

Gold

After yet another flat day of declines for the precious metal, Gold witnessed some buying interest in the overnight session. The buying interest has continued to be seen in the Asian trading session on the back of holiday demand and the re-opening of the Chinese markets. China, along with India are the largest consumers for the precious metal. The IMF downgrading global growth prospects regarded as a huge positive, as many believe that the equity trade might get unwound and traders might look at building on the safe haven trade.

Traders and investors would be closely watching out for the FOMC minutes to be released today to get an understanding of the future course of policy action that would be taken by the Federal Reserve. Many believe that the strong economic reports about the labour markets, might force the Federal Reserve to raise short-term interest rates, which is a huge negative for gold in the near term.

On the daily charts for gold, the precious metal was able to break above the downward sloping trend line at $1207, considered as a positive. Traders believe that until the time, gold remains above the psychological level of $1200, the buying interest should continue. The momentum indicator for gold is showing first signs of a reversal which indicative of the buying interest at current levels. The relative strength index for gold has given a buy signal showing inherent strength, which is a huge positive going forward. The resistance for the precious metal remains at around the $1242 levels in the near term.

 

Actionable Insight:

Long Gold at current levels with a strict stop loss below $1200 with a short-term target at $1242 in the near term

Short Gold if it closes below $1200 for a short-term target at $1175 with a strict stop loss above $1207

 

Ben Myers

Ben Myers

Success = few pips, thousand times

Ben Myers is one of the most respected and trusted names in the financial trading industry. Following a long and successful career with HSBC, Bank of Ireland and running his own investment firm

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