GOLD – Technical Analysis

Gold prices remain near two-year lows, and are forming a symmetrical triangle on the weekly chart. Gold plummeted to a low of $1,321 on April 16, from which the lower line of the triangle begins. This is the lowest level since the beginning of 2011.

After a slight rebound in early June, gold is heading lower again, trading below resistance at the 55-day moving average at $1,380. It is expected to drop further towards $1350 to reach the base- line of the triangle.

So far this year bullion has fallen 17 percent due to dollar strength. The two tend to have an inverse price relationship. Also some investors lost faith in the traditional store of value of the precious metal. Gold is said to be in a bear market now after plunging in April.

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