2016-10-07 15:05:29

Review and dynamics
The rise in the USD in the foreign exchange market, caused by the increased probability of the rate hike in the United States, has led to a decline in the precious metals. On Thursday the price of gold fell to the new lows in four months.

At СОМЕХ the closing price of December futures for gold fell by 1.2% to the level of 1253.00 USD per ounce, which is the lowest level since the beginning of June.

Spot price of gold at the beginning of European session is in the narrow range near the level of 1255.00.

On Wednesday the pair XAU/USD broke down important support level of 1270.00 (ЕМА200 on daily and weekly charts).

On the weekly chart the pair XAU/USD has broken down the lower limit of the ascending channel near the level 1290.00. The upper limit of the channel is above the level of 1410.0 (Fibonacci 50.0% to the downtrend since October 2012).

Our opinion
On the weekly and daily charts the indicators OsMA and Stochastic give signals to sell. The price has broken down important support levels of 1324.00 (Fibonacci 38.2%) and 1290.00 (ЕМА144 on the daily chart) and 1270.00 (ЕМА200 on the daily and weekly charts).

The decline in the pair XAU/USD continues.

Consolidation of the price below the level of 1218.00 (Fibonacci 23.6%) may trigger further decline in the pair XAU/USD and resumption of the downtrend, which began in October 2012.

On 4 hour chart the indicators OsMA and Stochastic give signals for long positions. Note that the pair can undergo upward correction with the target of 1270.00.

Consolidation of the price above the local resistance level of 1350.00 may trigger further rise in the pair. Breakout of the range above the levels of 1370.00 and 1385.00 will trigger the rise in gold price up to $1400.00 per ounce as predicted in the most doom forecast.

Support levels: 1252.00 and 1218.00.
Resistance levels: 1270.00, 1290.00, 1300.00, 1324.00, 1350.00, 1370.00, 1385.00 and 1400.00.

Trading tips
Buy Stop: 1260.00. Stop-Loss: 1248.00. Targets: 1270.00, 1290.00, 1300.00, 1324.00 and 1350.00.
Sell Stop: 1248.00. Stop-Loss: 1260.00. Targets: 1218.00 and 1200.00.

Breakout of the level of 1270.00
Breakout of the level of 1270.00

Indicators give signals to buy
Indicators give signals to buy