The gold price shits to consolidation phase after a sharp run facing resistance at 50Dsma but manages to close above 2Dsma by the end of the day. Investors choose to wait and see approached as momentum lacks.
From Gold headline: Islamic law will be declared the world’s 1.6 billion Muslims allowed to invest in gold.World Gold Council expects the move will bring hundreds of tons of additional demand for gold.
2016 world gold demand in the first quarter of 1290 tons, compared with the fourth quarter of 2015 increased 180 tons, an increase of 16%. At the same time, the price of gold in the first quarter also rose by 17%, the highest since 1986, the largest quarterly increase.
Goods financial analyst Nikhil Gupta believes that from a macro perspective, and two technical charts, gold’s gains have been temporarily suspended, the next 3-4 months, the price of gold fell to $ 1100.
ICBC Standard Bank analyst Kendall said that “the next few weeks, there is no reason to sell gold. The main reason is that the dollar will be lower, because of the possibility of short-term interest rates decreased, while the US economic growth is not as people expected so strong. ”
What’s on today?
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Technically the gold price pattern favors to bulls further upside looms. Today on Asia session, the price is slightly above 50Dsma. As we forecast at yesterday’s article, the price dips to the 20Wsma and rebounds nicely.
Trading resistance seems at 1253.00, 1257.00 and 1260.00
Support finds at 1240.00, 1234.00 and 1230.00
If the price settles above 1253.00 further retracement would expect to 1260.00, 1263.00 and 1270.00 levels.
Alternatively, selling looms below 1234.00 20Wsma to 1226.00, 1220.00 and 1210.00 levels.
For trading purpose, support remains between 1242.50 and 1239.00 levels. Selling looms below 1239.00to 1234.00 but selling pressure accelerates only below 1234.00 few pips lower.