Gold recap for 09.02.2016
I am calling it (hope not too early) - The story of the year goes to GOLD! As the top performer for me in the commodity markets since the beginning of the year, gold can't stop rallying. Bullion supported by China fears, transformed in-to world fears now, FED speculations and weakening dollar gave gold back its shine and is used once again for a safe-haven from investors.
Yesterday price opened at 1188.223, made a determined high towards 1198.965, slipped towards 1185.751 and finished the session with a close at $1188.891/oz. The steep movement was forming in the final months of last year as the mentioned back at that time triangle forming in, which was broken with a move up and 1079.508 was tested for a confirmation. From that moment on, gold formed a wedge, which was breached on the top side and we had 4 consecutive days of gold gaining ground. Even the last high from 15.10.2015 at 1191.541 and resistance level at 1184.743 didn't made it sweat. Price reached 1200.721 and actually on the daily seems that bulls didn't manage to hold their ground from 1195 towards 1200 and were pushed back from the bears every time and every push was hard. Hard profit taking may also be a key for gold loosing its steam now. Go to the weekly chart and you will see that price has reached the top of the trend line and currently it is retreating from it. So gold is heading down? Not necessarily at first. In the situation the wold and markets are currently in a right assumption will be that gold will continue to climb, moving past $1250 and the mentioned weekly trend line, forming some early thoughts that gold may be entering a new bull market. On the technical side a correction towards 1146.334 also is plausible to assume that may occur as the movement may be this time loosing steam (for now). As time goes, we will have more clues from the FED for their policy and rate hike views and where they see the dollar which have its reflection on the price of gold of course. All this dollar weakness may be temporarily, but fundamentals and comments from FED back it up. Dollar dumping from last year's rally is violent as the trade of the year for 2015 was betting on the $. Price managed to cut trough 1184.743 slightly and now it will act as a support for the price. Just don't be tempted in-to the trap of buying right at the top of the movement. Wait how price will fold in the coming days.