Tuesday’s Technical Analysis: Spot Gold
Spot Gold closed lower Monday.
The low range close set the stage for a steady to lower open Tuesday on the COMEX.
Stochastics and the RSI are turning 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 renews the rally off of its March lows, the 50% Fibo retracement mark of the January-March decline crossing is the next Northside target.
Note: India, announced it has eased controls on imports of the precious Yellow metal after its current account deficit narrowed sharply.
“Restrictions placed on import of Gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on Saturday, 29 November.
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.
India’s Akshaya Tritiya festival considered by India’s more than 900-M Hindus as an auspicious day to buy Gold and Silver, falls on 21 April this year. Bullion is bought in India during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives.
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