A few notes on the drop in the gold price.
Bullion.Directory precious metals analysis 4 November, 2014
By Terry Kinder
Investor, Technical Analyst
With the failure of the gold price to hold key support the question becomes, “Where are the levels of support and resistance?”
In the chart above, with the gold price breaking its support here are some key levels to consider:
1. $1,179.69 – $1,186.70 will provide resistance should the price of gold rise;
2. $1,138.10 – $1,143.63 will provide support if the price of gold declines;
3. $1,110.06 represents another support level;
4. $1,076.99 – $1,078.00 offers support;
5. Should $1,044.42 be broken then other areas of support would be $1,012,36 and $980.79.
In the chart above you may also notice that the gold price temporarily broke out of the Andrews’ Pitchfork but failed to rise above the downward sloping price trigger line. The gold price has now moved back into the pitchfork and barring a reversal of price momentum, the expectation would be that the price would move down toward the red median line somewhere below $1,100.00.
The gold priced in euros also appears to be ready to drop through support and the price could move back below the price trigger line.
The gold price in euros has been holding up better than the dollar gold price. However, it appears the euro gold price is slipping as well. If the downward price momentum continues it could well fall all the way below support and the price trigger. Some important price support and resistance levels for the gold price in euros are:
1. €933.11 – €945.98 represents resistance;
2. €890.91 – €902.81 is support;
3. €866.30 – €873.01 is further support;
4. Below those levels there should be support at the €835.84 – €843.72 level.
With the gold price at or close to technical breakdowns in both the euro and dollar it seems likely that price will fall further. As far as the gold price in dollars, recent dollar strength has not helped.
Given the technical picture, the most probable outcome is for the gold price in euros and dollars to decline.
This license allows for redistribution of this article, commercial and non-commercial, as long as it is passed along unchanged and in whole, with credit to Bullion.Directory, linking to the original article.Bullion.Directory or anyone involved with Bullion.Directory will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading in precious metals. Bullion.Directory advises you to always consult with a qualified and registered specialist advisor before investing in precious metals.
Material provided on the Bullion.Directory website is strictly for informational purposes only. The content is developed from sources believed to be providing accurate information. No information on this website is intended as investment, tax or legal advice and must not be relied upon as such. Please consult legal or tax professionals for specific information regarding your individual situation. Precious metals carry risk and investors requiring advice should always consult a properly qualified advisor. Bullion.Directory, it's staff or affiliates do not accept any liability for loss, damages, or loss of profit resulting from readers investment decisions.
Great piece, Terry. We’ve seen some demand in the euro after breaking 1.25. It will be interesting to see how the dollar will perform at four-year highs (or the ECB for that matter). Gold priced in euros moving lower would suggest the euro higher.
Keep the interesting analysis rolling!