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Gold Market Update: Down Trend Expected To Continue Through December

ByGoldTradingExperts.com
Published 11/26/2013, 06:43 AM
Updated 07/09/2023, 06:31 AM

After hitting a 4 month low at $1225 in early trading yesterday, gold recovered to close the day slightly up at $1253. The price remains within a well established down trend, though is currently at the upper boundary of the channel, with the 200 hour MA coming in at $1263 providing further resistance.

We expect the down trend to continue through December, though it is worth noting that the dollar is struggling to regain 8$1 - further dollar weakness could give gold a boost and a break of the down trend channel would suggest a move back up towards $1300 was likely.

Equities remain strong, with December a historically favourable month for the stock market, whilst the continued weakness in oil suggests inflation is not a concern at all in the short/medium term.

The trading will start to quieten down as we approach Thanksgiving on Thursday, with many traders starting to leave their desks on Wednesday afternoon. A word of caution - the thin trading conditions can lead to exaggerated moves in the markets, particularly if any unexpected news events transpire.

Support can be found at $1225, $1220, $1238, $1250, $1207-$1210, $1200 and $1180. A break of $1$180 would have serious bearish implications for gold and suggest a decline to $1000-$1050 in the short term.

Resistance can be found at $1260, $1270, $1277-$1280 and $1291-$1295. A break above $1295 would suggest an end to the downtrend, though it would take a break of $1360 to confirm this was the case.

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