GOLD: With a second week of downside pressure occurring the past week, further downside pressure is likely. Except it returns above the 1,285/1,300 levels, downside threat remains. On the downside, support comes in at the 1,200.00 level where a break will aim at the 1,180.00 level. Below here if seen could trigger further downside towards the 1,160.00 level where a break will aim at the 1,140.00 level. Its weekly RSI is bearish and pointing lower supporting this view. Conversely, resistance resides at the 1,25se40.00 level where a break will aim at the 1,320.00 level. A break of here will turn attention to the 1,350.00 level followed by the 1,380.00 level. A cut through here will extend gains towards the 1,400.00 level. All in all, GOLD remains biased to the downside on price failure
Right now, I wouldn’t bet against gold hitting $1,270 within the next few weeks, if not days. $1,300 looks well within reach also. A technical stop at $1.2020 looks logical too.
One thing I like about Gold is that it always finds a way to recover, somehow and at the moment, there is much to support an inevitable recovery. The US is the only thriving economy among the world’s leading economies, which makes it vulnerable to a ripple effect. This could usher in a major gold price recovery. At the moment:
S1 $1,230,
S2 $1,200 and
S3 at $1,180,
while at the top:
R1, $1,270,
R2 $1,300 and
R3 $1,320
My S1 just got blown away and now, it appears as though $1,200 could be tested come next week. A break downwards from this point could signal a major change in the current outlook for the yellow metal. I think the general expectation is that Gold will oscillate between $1,200 and $1,300 for the majority of the year. Therefore any price below $1,200 is a massive opportunity to buy, if indeed it does not prove to be a crucial change in bias.
