Review and dynamics

Since the beginning of the month the price of gold has been growing. The decrease in expectations of the interest rate hike in the U.S. in June caused by the release of disappointing NFPR for May at the beginning of this month, as well as economic uncertainty in the world is pushing up prices of gold. The spot-price has broken the strong resistance level of 1255.00 (ЕМА200 on the weekly chart) and is approaching the highs of last month and the annual highs at the level of 1300.00 USD per ounce.

Our opinion

Fundamental factors are in favour of the buy positions. On the weekly chart the price of gold is rising in the ascending channel with the upper limit above the level of 1.1360. Apparently, the US Fed will not raise rates on June 15. In this case, the rise in price can go above the levels of 1300.00, 1323.00 (Fibonacci 38.2% to the wave of decline since October 2012). On the daily, weekly, monthly and 4 hour charts the indicators OsMA and Stochastic recommend to open long positions.
If the price returns below the levels of 1255.00, 1240.00 (ЕМА144 on the weekly chart, it will be advisable to open short positions in the medium-term.
In case Janet Yellen’speech after the interest rate decision will indicate that the US Fed can raise interest rates in July or September, the price of gold may go down.
If the fed chief in her later after the publication of the fed's decision on rate will declare that the US Central Bank may raise short-term interest rates, it will be a negative signal for gold price.
The decline in the pair below 1240.00 may trigger further fall to support levels of 1218.00 (Fibonacci 23.6%), 1205.00 (ЕМА144) and 1195.00 (ЕМА200 on the daily chart.
The pair may return to downtrend after breakout of the level of 1195.00.
If the price conso9lidatews above the level of 1300.00 the rise in the price of gold is likely to continue.

Support levels: 1255.00, 1240.00, 1218.00 and 1200.00.
Resistance levels: 1280.0, 1300.00, 1323.00, 1360.00 and 1385.00.

Trading tips
Buy on the market. Stop-Loss: 1270.00. Targets: 1300.00, 1323.00, 1360.00 and 1385.00.
Sell Stop: 1265.00. Stop-Loss: 1278.00. Targets: 1255.00, 1240.00, 1218.00 and 1200.00.

To the level of 1300.00
To the level of 1300.00

In the ascending channel
In the ascending channel

The material published on this page is produced by LiteForex 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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