Mar 7, 2012

Bearish Tone For The Gold?

Last couple of days have delivered negative investor mood when it comes to precious metals. Faded expectation for another Quantitative Easing from FED combined with strong dollar pulled back the price of the gold to two month lows only for five days.

So where is gold headed? After successful brake above the triangle consolidation almost everybody started buying on the evidence of renewed bullish trend. However the party lasted up to yesterday, when the price of $1632 closed below long term trend (200-day moving average). The brake under the long term trend line raised questions about the strength of the bull trend. Although we have already seen one attempt for trend reversal in December it proved to be false and bulls were back in the game again. This time, however, if there is not solid support from the monetary authorities around the world the precious metal could experience some time in correction. The most bearish case is around $1500 level. Keep that in mind overall expectations for the gold support long term appreciation with target price $1950.

Bearish Brake Under 2000day Moving Average
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