Wednesday, November 20, 2013

Gold Analysis and Forecast

Gold Analysis and Forecast 20 November 2013 Trend is 

Negative

We discussed yesterday that traders might wait for US data relating Core CPI, Core Retail Sales, Retail Sales and Existing Home Sales. The last one is most important as the sale of a home involves a wide-reaching ripple effect. Such as, new owners do renovations  , a  financing bank sells mortgage  and brokers get commission to execute the transaction . Larger sale is an indicator of good economic health.
Market is standing at an edge where the rumours of tapering in bond purchasing push the prices of commodities towards lower levels and just in few hours or in a day we saw an increase in the price. If we observe on the basis of four weeks, we see that price moved in the range $101 only.
DATE          LAST      OPEN      HIGH      LOW       CHANGE % 
Nov 17, 20131269.601288.801289.001268.50-1.54%
Nov 10, 20131289.501287.601293.601260.700.12%
Nov 03, 20131288.001313.901325.701280.70-2.12%
Oct 27, 20131315.901353.301361.701305.800.00%
Highest  1361.70     Lowest: 1260.70     Difference: 101.00      Average: 1290.75
Gold did almost nothing except direction-less back and forth moves during the session on Tuesday. 1270 (plus minus $6) proved a significant support. we are unable to find supportive candles in order to start buying here. Once we get signals on a daily close, we will go long.
Yesterday Price of gold attempted to break below 1268 but buyers jumped in with more doveish comments from top Federal Reserve officials . Federal Reserve Bank of Chicago President Charles Evans said “I am not in a hurry myself to reduce the flow of purchases. I’d rather wait just a little bit longer and have more confidence”. While Fed Chairman, Ben Bernanke, still waiting for the labour market improvement to initiate the process of tapering.
The RSI and the MACD are suggesting a negative trend ahead On the 4-hour chart borders of the Ichimoku clouds reside at 1282 and 1293 levels. 1293 level may prove a strategic point for the bulls to conquer in order to advance towards the 1306 and further high (1326). The bearish pressure may increase if we close below the 1268 area, Next solid technical resistance stands at 1251.60. Break below 1251.60 may clear the ways to 1226.
we will continue to favour the bearish scenario as long as we are below the intraday resistance at 1278.
Support                1268.00   1261.00   1252.00   1240.00   1235.00
Resistance          1278.00   1285.00   1290.00   1296.00   1300.00

Gold Forecast

Price of gold moved lower before opening New York, Based on discussion above we favour lower prices for today. Currently we are waiting for a safe entry point.