Best performer YTD, gold is still in a yr-yr down trend, captured by a downward equidistant channel. Resistance from 1300 – 1330, support from 1180 – 1210.
Reasons to long gold
I am as bullish gold as can be; as long as central banks continue to implement/impose negative rates, I don’t see why grandma should not hide cash/pillow at home. Sad to see the purchasing power of one’s savings first be diminished by inflation over years and now deposits to be taxed. I can see a trend – Japan is the not first country to implement a negative interest rate policy and will not be the last. That makes hoarding cash/gold/safes trendy.
Gold is best performer YTD with 18% gain | Source: Finviz.com
Reasons gold price has not reversed, resistance overhead
However it is probably too early for gold bulls to celebrate. 3 months of rally simply does not reverse the year to year down trend that started in 2013 (which terminated the previous yr – yr up trend that topped in 2011). Based on this time frame, gold down trend (no reversal) is a fact. In addition, one can also draw an equidistant channel which also shows a down trend that is intact.
To trade objectively, 1300 – 1330 is a resistance gold must beat. Last year’s highest is 1307.60. 1180 – 1210 is the support zone to watch.
Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh's Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.
"I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."