Technicals | Nov 22 2010
By Rudi Filapek-Vandyck
On Friday, FNArena reported a positive analysis for gold by the TechWizard. However, not everyone looking at technical price charts agrees with this view. Technical market analysts at Barclays, for example, see the opposite when analysing their charts. They see weakness and more weakness ahead. At least for the short term. Barclays' technical analysts believe the larger bull trend for gold will likely take the precious metal to US$1459/85/oz into year-end.
Previously, the team at Barclays in London thought technical support at US$1314/oz would mark the low point in this pull back, but recent market moves have put a question mark behind this view. The analysts cite a bearish divergence signal on weekly and daily charts which would be a warning that the uptrend is faltering. This implies that downside risks are increasing, say the analysts. They draw a comparison with the same pattern back in May/June.
The analysts at Barclays do highlight they remain bullish on gold's prospects and would turn themselves into "bargain hunters" were the price of gold to approach US$1250/oz.
The views expressed are not FNArena's (see our disclaimer).