Gold continues on its downside. As indicated earlier i had expected gold to continue till around 3rd quarter to weaken. Particularly during these months before the festivities of Diwali and the marriage season following it, gold has shown a tendency to weaken. Looking at the channel chart below one can see that Gold has just about neared its bottom. It might possibly touch 1050 to end the downside.
If we look at the below chart and check the retracement levels from the start in 2001-2002 when the market went into a bull run to the top made in 2011 we can see that market is still above the 50% level which makes the case for moving up for gold stronger then silver.
If we look at the daily closing on Friday we can see a double bottom and furthermore that double bottom is with a divergence. That makes a further pull back on Wednesday once Fed meeting result is out a possibility.
Lastly one can see the chart below and a good entry point would be if the market closes above 1125 this month. That would be another signal that gold is bottoming out and unlikely to test the low of 1179 it made earlier this week. However a close below the horizontal line, and a test of 1080 or even move to 1050 cannot be ruled out.
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