Gold sideways trading still on
Gold continued to fluctuate around the 1600 mark, with disappointments of the US Fed and the ECB being the major drivers of the decline. Gold was the only metal in the complex that recorded weekly fall last week. However, market analysts expect the uptrend to continue.
Gold failed to hold above the resistance level of 1625.7 and subsequent break of 1600.8 minor support indicates that recent sideways trading from 1526.7 is still on.
In the coming week, some traders suggest the yellow metal may test the upper end of the current trading range, which tops out around $1,640 an ounce. It is likely gold will only rise to about $1,630, an area it hasn’t bested since etching the upper band of the trading range, which extends from around $1,530 to $1,640.
On the downside, a break below 1562 may lead to breakout to below 1526.7. But, strong support should be seen around 1500, the psych mark to contain any downside. A break of 1628 will be another sign of upward breakout and break of 1642.4 should send the yellow metal through 1700.
The big picture remains relatively unchanged and rather optimistic. Price actions from the all-time high of 1923.7 are viewed as a medium term consolidation pattern. There is no indication that this consolidation has ended, and more range trading is expected. The downside of any falling leg should be contained by 1478.3/1577.4 support zone. Bring on a rebound and a break of the key resistance of 1792.7 will be the first signal of up-trend resumption. Barring that, the consolidation will extend.
