Current trend

After a significant decline from the beginning of April to mid-August, the gold price is trading within an upward correction. During the autumn months, it has recovered by more than 80 points. However, in the long term, the trend stays downwards. At the end of October, the instrument reached the July maximum at 1244.00, failed to consolidate on it and began to decline. The decrease developed to the lower border of the upward correctional channel, after which the rate began to grow again.

Now the precious metal is trading at the level of 1225.00. The main strengthening catalyst is the change in trading sentiment: USD index tends to fall, reflecting a decrease in demand for currency.

This week, special attention should be paid to data on the labor market and major US indices.

Support and resistance

Technically, the pair is trading within a medium-term upward trend. In the medium term, the price may reverse into a sideways consolidation movement. In the long term, it is better to increase the volumes of short positions and wait for a decline to recent local lows, and then for a fall to a minimum of the end of 2016 at the level of 1122.00.

On the daily chart, technical indicators give an ambiguous signal: the volume of long MACD positions is decreasing but the signal line is at the zero mark, and Bollinger bands are lined up horizontally.

Resistance levels: 1225.00, 1237.00, 1244.00, 1255.50, 1266.00.

Support levels: 1214.00, 1208.30, 1196.00, 1183.40, 1180.00, 1160.00.

Trading tips

It is relevant to increase the volumes of short positions from the current level and open pending orders from the levels of 1244.00, 1255.50 with the targets at 1208.30, 1180.00 and stop loss 1269.00.

Spot Gold

BuySellSpread
1248.341247.7361

Scenario

TimeframeWeekly
RecommendationsSELL
Entry Point1223.13
Take Profit1208.30, 1180.00
Stop Loss1235.00
Support levels1160.00, 1180.00, 1183.40, 1196.00, 1208.30, 1214.00, 1225.00, 1237.00, 1244.00, 1255.50, 1266.00

Alternative scenario

RecommendationsSELL LIMIT
Entry Point1244.00, 1255.50
Take Profit1208.30, 1180.00
Stop Loss1269.00
Support levels1160.00, 1180.00, 1183.40, 1196.00, 1208.30, 1214.00, 1225.00, 1237.00, 1244.00, 1255.50, 1266.00
XAU/USD: the price can decrease

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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