Gold Maintains Rebound Off Double-Bottom Bounce

November 18, 2013 – Gold (daily chart) has tentatively maintained its slight rebound off a short-term double-bottoming pattern around the 1250-1265 support zone.

The 1265 area has served as a major support/resistance level in the recent past. After hitting a multi-year low of 1180 in late June on the tail-end of a dramatic nine-month plunge from last year’s 1800-area high, gold has been on a choppy ride of sharp ups and downs.

Although still technically entrenched in a strong bearish trend, as indicated by both the 50- and 200-day moving averages, the precious metal will likely see continued directionless whipsaw, at least for the near-term. This condition should prevail until there is a substantial move either below the 1180 multi-year low, which would indicate a clear downtrend continuation, or above the 1425 area, which would provide a likely indication of an upside reversal.

In the meantime, the key downside level to watch would be the noted 1250-1265 support zone, a breakdown below which should target 1180.

To the upside, the next major resistance objective is around 1320-1330, a breakout above which could shoot for the 1365 and then 1425 resistance levels.

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