Technicals | Dec 06 2011
By Greg Peel
William Moore, technical analyst at RBS, suggests gold looks poised to break higher from current levels with (all prices US$/oz) 1841 an appealing objective. Last night gold fell to around the 1723 mark.
This will depend, however, on breaches of the 1752 and 1791 levels which have both withstood recent testing and represent Fibonacci retracements from the principal September range of 1920-1583. Moore remains bullish but suggests breaking 1752 and 1791 is key.
If not, Moore sees support at 1712, and thereafter at 1694 and 1663.
Barclays Capital technical analysts note the US dollar has been net stronger of late and gold has reverted to trading in line with risk assets. A current lack of physical demand has meant limited gains and suggests the downside looks more fragile in the near term.
Barclays remains positive beyond the short term nevertheless, suggesting the macro environment is supportive and investment demand will strengthen with ongoing purchases from central banks.
Also citing Fibonacci, Barclays sees support around 1600 as gold is looking to a move towards 1800 before the 1840 level comes into play, predict the analysts. This Fibonacci level is currently “shielding” the 1921 high.
Near term Barclays sees support at 1700-1725 and resistance at 1775-1803 while remaining medium term bullish.
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