Commodities | May 23 2013
We have been talking about gold consolidation for sometime, and the price action over the last few trading sessions has been supportive of a low. Early Monday when the gold market opened we had a large initial sell off which was indicative of another bout of selling. Similar in nature to the April 15 sell-off. However good support entered the market and the subsequent bounce suggests a low of some importance has ben put in place. At the moment we see sentiment towards the metal as being really mixed. On one hand we have the paper gold traders, who are bearish the commodity, and then on the other hand we have physical traders who cannot get a enough of the metal. We expect the market will remain mixed for sometime however the longer we can hold above US1330 the more positive we get that a low is in place.
Although we took out some of our position we have reentered a long at US1349 and happy to hold. The stop on the position is below US1320 as a break below here puts in question any bull move for a while.
Chart Point – Gold:
Technically, a double bottom is in play. We need to see a break above USD1400 to conclude that a low of some significance is in place. Momentum indicators are on their lows. Supporting the low.
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