Yesterday the price of gold barely changed amid low trading activity due to closed US markets for Martin Luther King Day.
The price is supported by instability on the Chinese stock market that makes investors worry about world economy growth. At the same time, the People’s Bank of China applied additional measures to battle financial speculations and raised the Yuan thus bringing some relief on the markets.
In addition, demand for gold keeps growing amid falling oil prices that on Monday briefly declined below $28 per barrel.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is narrowing. MACD is falling and giving a weak sell signal. Stochastic is growing.
The indicators recommend waiting for clearer trading signals.
Support levels: 1088.66 (local low), 1083.26, 1081.47, 1078.17 (14 January low), 1074.45, 1070.00 (4 January low), 1066.31, 1060.00.
Resistance levels: 1095.53 (13 January high), 1101.05, 1105.50, 1110.00 (8 January high), 1115.70.
Long positions can be opened after the breakout of the level of 1092.90 with the target at 1106.00 and stop-loss at 1092.20. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 1085.60 with the target at 1073.00 and stop-loss at 1092.00. Validity – 2-4 days.