Gold shines near six-year high; the rally could stall but not end.

Gold bulls got extra energy on Friday, driving the price towards an almost six-year high of 1,411. Downside corrections are likely in the very short term as the stochastics are set for a bearish cross above the 80 overbought level. The MACD however, has yet to show any sign of weakness, an indication that any slowdown in the market may be short-lived.

Slightly higher, the 50% Fibonacci ratio of 1,421 of the three-year-old down-leg from 1,796 to 1,046 could prove a trigger point for another bullish round if breached successfully. Such a move would shift all the attention towards a stronger barrier around 1,520.

The 1,400 level is currently working as immediate support to downside movements. Falling aggressively below that number, the next stop could be within the 1,365-1,356 former resistance zone, while even lower the market may be exposed to the 38.2% Fibonacci of 1,332 and 1,325.

In the bigger picture, the recent gains turned the market strongly bullish as well. The positive slope in the 50-day simple moving average (SMA) suggests that the bright outlook may not fade soon.

In brief, gold is trading in the green both in the short- and the long-term, eyeing a key resistance around  1,421 in coming sessions.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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