GOLD managed to hold the price above its 200-week moving average line and rallied from it last week. It closed above 1350 for the first time since July 12 and had a second consecutive higher monthly close.
Last week’s trades
No mysteries in last week’s trading. The market stayed just above Nat’s first support line and stayed inside a relatively narrow trading range for the first three days.
On Wednesday the combination of the GDP numbers release and the FOMC statement pushed gold futures to break out of the trading rang and run up about $20 to Nat’s keyline the same day.
The rally continued Thursday and Friday and ended just below Nat’s 1st sell level close to the high for the week. The whole move was contained between the first support and Nat’s weekly sell level.
Depending on where you got in and how long you stayed, the trade was worth between roughly $2,000 and $3,000 per contract.
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The 1300-10 zone becomes a solid support zone now. Next step for GOLD is to concentrate on fighting through last Month’s high at 1375, which overlaps the long-term downtrend line and the psychological resistance line at 1400 level.
Short-term indicators move out from their oversold territories, so a bounce should be expected like last week.
But the long-term resistance lines overhead (both the weekly and monthly) may not be so easy to break through. The last test was stopped at the declining trendlines; this time we may see a breakout from those resistance lines, and then a reversal movement.
Step by Step. 1350-55 is a key zone for this week. In the early days we should see more buying pressure if there is a pullback into 1337-35 and/or 1328-27.
We may also see a further high move if 1348-45 holds the price and prevents it from falling.
In any case we will see buying on the pullbacks this week.