Review and dynamics
Yesterday’ interest rate decision by the US Fed following up comments, which showed concerns about the state of the American and world economies, inactivity of the Bank of Japan and uncertainty about Bretix referendum on 23 July, cause the increase of volatility in the market and sharp rise safe-haven assets, such as gold and the Yen.
The price of gold has been rising since the beginning of the month. Today, spot-price has broken strong resistance level of 1300.00 (highs of this year and the previous month and psychologically important level). Uptrend continues.
On the daily, weekly, monthly and 4-hour charts the indicators OsMA and Stochastic suggest to open long positions.
Fundamental factors are in favour of sell positions. The price of gold continues to rise in the ascending channel on the weekly chart with the upper limit above the level of 1.1360.
It is possible that the price can break down resistance level of 1323.00 (Fibonacci 38.2% to the wave of decline since October 2012). And it may happen before 23 June, if, the latest poll shows that the number of supporters of Bretix will not drop versus the number of people who wants to stay in the EU and also if the US Fed indicates probability of the interest rate increase in the near future.
It is difficult to predict movement direction in the financial markets and in the price of gold, which may take place after 23 June.
However, market participants believe that the price of gold can reach the level of 1400.00 USD per ounce by the end of the year.
If the price of gold go down below the levels of 1255.00 and 1240.00 (ЕМА144 on the weekly chart) it is advisable to open short positions.
The decline in price below the level of 1240.00 may trigger further fall to support level of 1218.00 (Fibonacci 23.6%, ЕМА144 on the daily chart). After breakdown of this level downtrend may resume.
It is likely that the price of gold will continue to grow.
Support levels: 1300, 1280.00, 1255.00, 1240.00, 1218.00 and 1200.00.
Resistance levels: 1323.00, 1360.00, 1385.00 and 1400.00.
Buy on the market. Stop-Loss: 1290.00. Targets: 1323.00, 1360.00, 1385.00 and 1400.00.
Sell Stop: 1285.00. Stop-Loss: 1305.00. Targets: 1255.00, 1240.00, 1218.00 and 1200.00.
In the ascending channel
Strong upward momentum continues