29 Aug 2013
Gold hits ST upside projection at 1,431 and reverses lower Wednesday
FXstreet.com (Barcelona) - As it was part of the recent “risk-off” trade, gold reversed hard to the downside once news of a more measured stance by the US towards Syria hit the wires.
Gold is clearly part of the current safety trade
Gold was continuing to rally early Wednesday, but was overbought and approaching 1,431 resistance. Sure enough, once resistance was tested (and slightly exceeded), the news of the US backing off their hard line stance came out, the DXY reversed higher and the recent beneficiaries of the safety trade – gold, silver and the Yen – all sold off.
The question on everyone’s mind is whether it (the Syrian) situation will continue to improve or not. If it does or if the news dries up for a day or two, gold should continue this pullback. If things flare up again, though, gold will likely see another ramp up in prices.
Technical outlook for gold
Now that gold's short-term target at 1,431 was tested, technicians are calling for a modest pullback to the 1,365 – 1,370 range (gold was trading at around 1,415 recently). Technicians also add that gold should make it up to the 1,438 – 1,440 Fibonacci-generated target range before this macro corrective rally phase is over.
Gold is clearly part of the current safety trade
Gold was continuing to rally early Wednesday, but was overbought and approaching 1,431 resistance. Sure enough, once resistance was tested (and slightly exceeded), the news of the US backing off their hard line stance came out, the DXY reversed higher and the recent beneficiaries of the safety trade – gold, silver and the Yen – all sold off.
The question on everyone’s mind is whether it (the Syrian) situation will continue to improve or not. If it does or if the news dries up for a day or two, gold should continue this pullback. If things flare up again, though, gold will likely see another ramp up in prices.
Technical outlook for gold
Now that gold's short-term target at 1,431 was tested, technicians are calling for a modest pullback to the 1,365 – 1,370 range (gold was trading at around 1,415 recently). Technicians also add that gold should make it up to the 1,438 – 1,440 Fibonacci-generated target range before this macro corrective rally phase is over.