Thursday’s Technical Analysis: Spot Gold

Posted by: : Paul EbelingPosted on: October 30, 2014 Thursday's Technical Analysis: Spot Gold

Thursday’s Technical Analysis: Spot Gold

Spot Gold closed lower Wednesday.

The low range close set the stage for a steady to lower opening when Thursday’s US session begins to trade.

Stochastics and the RSI are Neutral to Bearish indicating that sideways to lower prices are possible near term.

Closes below the 20 Day MA crossing will confirm that a short term top is in.

If Spot Gold  extends this month’s rally, the 50% Fibo retracement mark of the July-October decline crossing is the next Northside target.

The negative possibility remains valid today unless the price breaches 1215.75, as RSI and MACD support these expectations.

Linear Regression Indicators began trading negatively and the precious Yellow metal is trading below them now, which support the possibility of extending Bearishness.

Support: 1205.00, 1200.00, 1182.45, 1175.40, 1150.00

Resistance: 1211.90, 1215.75, 1220.00, 1226.60, 1231.05

Recommendation: negative expectations below 1215.75, risk-limit above 1226.6


Note:  Gold’s resilience in here points to more gains, also its suggests that the stock market recovery could be short-lived otherwise the need for the safe haven asset would have surely been lessen.

The rising price of Gold has been matched with increased Bullish speculation.

According to the CFTC, net long positions in the week to 14 October climbed by 12,333 contracts. At 42,196, net Length were at their highest level in 5 wks.  ETF inflows have lrisen in response to the plunging equity markets.

Note: support for Spot Gold comes from jewelry demand from India in the lead up to and during the wedding season, which started in late September. India did record a 176% increase in Gold imports in August to US$2-B from about US$756-M.

Overall, the impact of wedding season spot gold  buying  has faded in recent times as India is no longer the world’s largest Gold consumer, partly because of the on-going government  import restrictions on precious metals. If they are further relaxed, perhaps India will regain its Top spot.

Spot Gold drop to 15-month lows is timely for Asian buyers, but even the Gold loving Indian matriarchs may not be enough to supr the precious Yellow metal through the resistance in the Q-4 unless the Buck retraces some of it Q-3 surge, and the Gold Bears exhaust themselves (run out of cash).

Have a terific week.


Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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