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26 Aug 2013
Gold continues to climb higher; key resistance at 1,438 – 1,441 looms
FXstreet.com (Barcelona) - Gold and silver held their own early last week as the DXY rallied. Then, when Friday’s sharp decline in DXY arrived, the metals were able to resume their upward track.
Gold will likely continue its inverse relationship with the DXY
Gold traders seemed to dismiss the possibility of the Federal Reserve actually following through with their September tapering program during the recent rise in rates and last week’s rise in the DXY. Gold futures only dropped a few dollars at its lowest point last week even as rates reached above 2.9% and as the DXY rallied from 80.75 – 81.72 between Tuesday and Thursday. The emboldened gold bulls will likely only be deterred by a more convincing upside move in the DXY - one that surpasses the technical trip wires north of 82.
This week, traders will be focused on data points throughout the week – starting with US data flow Monday and Tuesday and various other key DXY-critical countries joining the party mid-week.
Technical outlook for gold
Gold blew through short-term resistance at around 1,394 Friday and has continued higher early this week – clearing the psychological barrier at 1,400. However, technicians maintain that the more serious test for gold will not come until the 1,438 – 1,441 Fibonacci-generated target range. Short-term support for gold comes in at the horizontal line support created by the previous breakout point of 1,349.10 on the low side and by the 8/20 low of 1,351.60 on the up side.
Gold will likely continue its inverse relationship with the DXY
Gold traders seemed to dismiss the possibility of the Federal Reserve actually following through with their September tapering program during the recent rise in rates and last week’s rise in the DXY. Gold futures only dropped a few dollars at its lowest point last week even as rates reached above 2.9% and as the DXY rallied from 80.75 – 81.72 between Tuesday and Thursday. The emboldened gold bulls will likely only be deterred by a more convincing upside move in the DXY - one that surpasses the technical trip wires north of 82.
This week, traders will be focused on data points throughout the week – starting with US data flow Monday and Tuesday and various other key DXY-critical countries joining the party mid-week.
Technical outlook for gold
Gold blew through short-term resistance at around 1,394 Friday and has continued higher early this week – clearing the psychological barrier at 1,400. However, technicians maintain that the more serious test for gold will not come until the 1,438 – 1,441 Fibonacci-generated target range. Short-term support for gold comes in at the horizontal line support created by the previous breakout point of 1,349.10 on the low side and by the 8/20 low of 1,351.60 on the up side.