Commodities | Apr 10 2006
Gold bugs should take heart from technical analysis experts’ views at Barclays Capital who maintain their view the metal is still in a long term uptrend, signaling Friday’s sell-off was nothing more than a temporary blip on the metal’s way to surpass US$600/oz.
"One day of corrective activity is not enough to suggest a top", the analysts proclaim, adding there’s probably an easy explanation for what happened on Friday: profit taking ahead of the weekend and the psychologically important US$600/oz level.
For the short term, the experts believe the metal will find technical support at US$582/575.
Reaching US$600/oz would imply the metal will resume its uptrend towards US$621/oz, Barclays believes, explaining this level equates to a 61.8% Fibonacci retracement of gold’s fall between 1980 and 1999, "as well as roughly channel resistance".
As was the case last week, Barclays believes weekly patterns and Elliott wave counts are indicating there are still higher highs to come for gold. Barclays maintains the view gold is set to trend "well above US$600/oz in the months ahead.
At GSJB Were the precious metals experts now believe gold may trade as high as US$700/oz over the coming twelve months.