Analysis: Almost Time to Sell Gold Again?

DailyFX

Gold in USD terms has enjoyed a steady recovery over the past few weeks since finding support in mid-April near a Fibonacci projection related to the October and March highs in the 1320 area. However, within the context of a broader downtrend the price action of the past few weeks looks only corrective to us and susceptible to at least some sort of re-test of last month’s lows before embarking on a more important bottoming process.

Several medium-term Fibonacci and Gann time cycle relationships point to the latter half of this week and the first part of next week as a potential timeframe for a turn in the metal. Some final strength could be witnessed during this time, but important Gann & Fibonacci resistance in the 1495 to 1510 area is expected to hold. Weakness below the 3rd square root progression of the year-to-date low in the 1430 area would be further evidence that a renewed move lower is underway. On the other hand, a close over 1510 paves the way for a stronger immediate correction.

GOLD Daily Chart: May 9, 2013

View photo

.
range_xau_body_Picture_2.png, Analysis: Almost Time to Sell Gold Again?

Charts Created using Marketscope – Prepared by Kristian Kerr

Event Risk Over Coming Sessions:

range_xau_body_Picture_1.png, Analysis: Almost Time to Sell Gold Again?

Source: DailyFX Calendar

LEVELS TO WATCH

Resistance: 1488 (Last week’s high), 1497(1x2 Gann line from 2012 high)

Support: 1430 (Gann level), 1404 (50% retracement of April to May advance)

STRATEGY – Sell XAU/USD

Entry: 1495

Stop: Close above 1510

Target 1: 1404

Target 2: 1320

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter at@KKerrFX.

Are you looking for other ways to pinpoint support and resistance levels? Take our free tutorial on using Fibonacci retracements.

Need guidance managing risk on trades? Download the free Risk Management Indicator.

.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

Rates

View Comments (7)