Technicals | Apr 06 2010
By Chris Shaw
Technical analysts at Barclays Capital have observed how the technical picture for gold has gradually turned bullish, noting the metal's price has recovered above the daily Ichimoku cloud since early last week and has now made a sustained break above trend line resistance currently at US$1,117 per ounce. The team is therefore sticking to a bullish bias.
Shorter-term the analysts suggest the strong close last week has completed a bullish flag formation, so opening the door for a move though the March 2003 high of US$1,145 per ounce. There is also scope for the move to continue to the larger retracement and congestion resistance area of US$1,157/$1,165 per ounce.
Prices may prove a little more sticky in this area according to the analysts, but there are supportive factors such as the CFTC Commitment of Traders Report suggesting speculators are beginning to rebuild their positions.
This leads the analysts to suggest a break above the US$1,157/1,165 level would confirm a catch-up for the gold price, with prices likely to surge back to the all-time high of US$1,226 per ounce.
Medium-term the analysts suggest gold is likely to trade in a range of US$1,000-$1,225 per ounce before the bull trend re-starts, pushing prices to US$1,300 and US$1,500 per ounce.
