Gold Continues To Exasperate
Anna Coulling | Jan 27, 2013 12:19AM ET
The gold price continues to tease and exasperate gold bugs as each attempt to recover and move beyond the $1700 per ounce price point is promptly extinguished with a sharp reversal, which was once again the case in Friday’s trading session.
From a technical perspective, and as stressed in previous gold market analysis, the $1700 per ounce price point is now taking on increased significance, particularly following the posting of an isolated pivot high on 22nd January which saw gold touch an intra day high of $1695.90.
This aligns almost exactly with the isolated pivot high of 2nd January at $1695.40. These price points were further reinforced this past week at failures at this level virtually every day and confirming the weakness in gold which we saw Friday, as the February GC contract closed at $1669.90.
From a fundamental perspective, this lack of interest is partly due to the current move back into equities and indeed many commentators are now questioning whether it may be time to sell gold and move into gold mining stocks instead. Whilst gold stocks underperformed in 2012 against other sectors, 2013 may well be the year for them to shine whilst the physical asset becomes less attractive.
The question now, of course, is where next for the gold price and, given the above fundamental and technical pictures, we may well see further weakness in the short term, possibly to test the interim platform of support in the $1640 per ounce region. From there we may even see a deeper move back down to $1620 per ounce where gold will find sustained price congestion as well as a solid platform of potential support.
Indeed, this area may hold good, as has happened in the past, and was a key feature of the recovery on the 4th January which triggered the recent short term move higher.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.