Current trend
Since March gold the price of gold has fallen by 100 USD per troy ounce. Many experts believe that decline in price will continue especially if American economy demonstrated new signs of recovery. At the moment gold prices are approaching the lower limit of the trading channel at the level of 1282.06. If this level is broken down, the price can go down to the level of 1200.00.
Note that US unemployment rate will become known today. According to forecast it shall decrease to 6.6%. If these expectations will be justified, the pair XAU/USD can continue to decline.
Deutsche Bank analysts think that gold will trade at the level of 1261.00 in 2014. Support to gold can be provided by Asian countries, where demand for gold is still high.
Levels of support and resistance
The nearest resistance level is 1282.06 – lower limit of the trading channel.
Support level is 1300.00.
On the four hour chart Williams’ Percent Range indicator is in the range of (-91), showing that gold is oversold and short-term correction is possible soon. General trend is still downward.
Trading tips
It is recommended to open short positions after breakdown of the level of 1282.06 with stop loss at 1299.06 and a target of 1250.00.
Dmitry Agurbash,
Analyst of LiteForex Group of Companies
