Monday, November 21, 2011
Gold nearing important technical support level
The $1680 level is an important chart area as it has served to function both as overhead resistance and as downside support depending on the status of the gold market at the time that price has neared this area. In today's session, it is acting as a downside support level thus far holding price from dropping further as the risk trades are once again taken back off.
Should this critical level fail to stem the decline in gold, price will fall into the next band of support which is near and just above the $1640 level, a level that also coincides with the rising 150 day exponential moving average. That moving average has seen value-based buyers emerge over the last two months so we can expect it to uncover similiar buying once again should price move this low.
For gold to stem the current tide of bearishness and rattle the shorts a bit, it will need to recapture the $1710 - $1715 level for starters with a further push into the $1740 region necessary to bring in some momentum based buying.
Should this critical level fail to stem the decline in gold, price will fall into the next band of support which is near and just above the $1640 level, a level that also coincides with the rising 150 day exponential moving average. That moving average has seen value-based buyers emerge over the last two months so we can expect it to uncover similiar buying once again should price move this low.
For gold to stem the current tide of bearishness and rattle the shorts a bit, it will need to recapture the $1710 - $1715 level for starters with a further push into the $1740 region necessary to bring in some momentum based buying.
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