Gold Trades Narrow But Can It Recover From a Three-Month Low?

Gold Trades Narrow But Can It Recover From a Three-Month Low?

By: Ben Myers | YesOption | On:10-09-2014 05:14
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Gold Trades Narrow But Can It Recover From a Three-Month Low?

Gold continues to consolidate and trade in a very narrow range of four dollars. XAU/USD opened at 1,254.85 in Asian trading session. XAU/USD has strong support at $1,245 levels which is critical for bulls. More upside in yellow metal would be seen only if it closes above $1,262 for two consecutive days than it can go up till $1,282 and $1,300 in near term.

In the bullion market, the international price of Gold remained steady around the $1,250 mark yesterday after hitting the three month low mark couple of days back. Over the past week, the price of the yellow metal had rallied hard to remain at the $1,290 mark for several days, before ceding ground to the changing global economic situation and settling at the $1,275 benchmark temporarily. Even this resistance level was soon breached resulting in the three month low price as described above.

For the bullion investor, this development comes as an anti-climax, since the price of precious metal had displayed signs of being on a revival path just couple of week’s back. It had posted strong gains from it base point of $1,275 on the news of build up in demand for physical form of gold from its traditional markets of China and India. These increased demands, helped the metal inch its way upwards towards the $1,290 mark before hitting the top level resistance a week back.

During trading on 9th September, Gold settled below $1,250, even as the U.S dollar managed to post gains. These developments were in the back drop of the markets anticipating the Federal Reserve increasing the base interest rates at a much faster pace than previously thought off. The drop in the international price of gold in tandem with the increase in the value of the dollar, has led the market analysts to believe that other precious metal prices too could come under severe downward pressure in the short term.

Actionable Insight

Buy Gold above $1,262 with stop loss of $1,248 for target of $1,270 and $1,287.

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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