Gold has bounced around unchanged in a narrow range today with no real direction - any dips to the low 1570s are being bought and any rallies up to 1580 being sold.
The price continues to hold above 1550 and the RSI suggests that a rally is brewing, though we cannot rule out another sharp sell off and a visit to critical major support at 1525.
However, we don't think this is going to happen, indeed we are still confident that the price will move higher from here this week. A move above 1620 will confirm the bottom is in and likely see a scramble to cover shorts and a quick move higher, initially to 1630 with a target of 1655-1660 after that.
All eyes are on the US jobs number on Friday, with particular focus on the unemployment rate, though before that we have three important central bank interest rate decisions from the Bank of England, ECB and Bank of Japan. Although all three are expected to do nothing this time, the wording of the issued statements will be scrutinised for clues of pending rate rises or further economic stimulus.
Oil continues to fall, though is approaching the 61.8% retracement of its recent rally to $98, so may find support there at around $89.50. The dollar is trading at recent highs and looks to be breaking out higher, though as we have mentioned before, there is little correlation between gold and the dollar at the moment.
Interestingly, the strongest correlation at the present time is a negative one with equities, i.e. as stocks rise, gold falls and vice versa. With many traders calling a top in equities, this may be the spark that kicks off the next rally in gold.
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GOLD CURRENT TRADE
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GOLD CURRENT TRADE
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Our Position
Bought 1Apr Gold on 28/02/2013
Bought 1Apr Gold on 28/02/2013
Entry: 1577
Stop Loss: 1552
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
King Regards
