XAU/USD: Thursday's General Review
Mayzus | Dec 28, 2017 07:50AM ET
Current trend
Gold continues to trade in an uptrend. The nearest resistance level is at the 1295.97 mark, the next is stronger: at 1300.00. If in the near future we do not see testing this value and fixing above, then the probability of correction to [1/8] Murrey or to the level of 1281.24 is high.
As for the fundamentals, they are not in favor of precious metals, as the Fed will continue to tighten monetary policy, raising the interest rate, which will add to the appeal of the US dollar.
But, on the other hand, if the demand for physical gold continues to grow, then this will keep the asset from a strong drawdown. In 2017, the increase was +17%, and many analysts also forecast further strengthening of this indicator. The central banks of developing countries such as Turkey or Russia can also render significant support, which may begin to increase purchases to hedge assets.
Do not forget about the American stock market, which, according to economists, is overheated and if a deep downward correction begins, then this will also increase the demand for gold. According to the forecast of Commerzbank (DE:CBKG), the troy ounce in 2018 may amount to 1350 US dollars.
Support and resistance
Stochastic is at the level of 80 points and indicates a possible correction of the asset.
Resistance levels: 1295.97, 1300.00.
Support levels: 1281.25, 1258.66.
Trading tips
Short positions may be opened from the resistance level of 1300.00 with take-profit at 1281.25 and stop-loss at 1304.00.
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