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
Charts Created using Marketscope – Prepared by Kristian Kerr
Event Risk Over Coming Sessions:
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
Stop: Close above 1510
Target 1: 1404
Target 2: 1320
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- Basic Materials Industry