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Gold Powered Higher, Pushed Up By Dollar Weakness

ByGoldTradingExperts.com
Published 08/11/2014, 06:30 AM
Updated 07/09/2023, 06:31 AM

Gold powered higher on Friday, bouyed by dollar weakness and geopolitical uncertainty, particularly in the Middle East, though also in Russia/Ukraine. Gold made a high at the key $1322 level that has been such an important pivot for the yellow metal since the April 20$13 crash before retreating back to close the week around $1310.

This price action formed a "doji" on the daily chart that suggests a short term top may be in place, however the favoured Elliot Wave scenario is that we are just starting a new bullish leg after a "double 3" correction - the local top could therefore be the Wave 1 peak, with Wave 2 underway.

We need to keep an eye on both equities and the dollar - continued equity weakness coupled with further dollar selling would be very bullish for gold, however a continuation of the long term equity rally will see gold back under pressure again.

We are also in the midst of the "summer doldrums" period for gold, where prices tend to drift swideways with a downward bias before finding renewed buying interest in the September, followed by a pause in October before a strong end to the year.

Support can be found at $1302-$1305, 295-$1297, $1286, $1280, $1274, $1263, $1257-$1260, $1250-$1252, $1237-$1240, $1220-$1225, $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 - a failure to break the 65 week MA would make this scenario much more likely.

Resistance can be found at $1310-$1312, $1322-$1325, $1333-$1335, $1340-$1342, $1352-$1354, $1392-$1395, $1400, $1420 and $1435. A second failure to break through the key 65 week MA would suggest that the intermediate down trend is intact and a retest of $1240 and possibly $1180 is likely.

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