Gold Finds Support Around $1178

Gold prices fell 0.7% on Wednesday to settle at their lowest level in more than three weeks as signs of progress in the Greek bailout saga and better than expected U.S. economic data curbed appetite for the metal. The XAU/USD pair dipped to a low of $1179.59 after the Commerce Department reported the trade gap narrowed to $40.9 billion from March's revised deficit of $50.6 billion and the ADP Research Institute said private sector added 201000 jobs last month

Focus now turns to the Labor Department's more comprehensive non-farm payrolls report which will be released on Friday. Although the ADP's report isn't so reliable predicting the government's data, figures point to a pick-up in hiring. From a technical point of view, trading below the weekly and daily Ichimoku clouds imply that the path of least resistance is to the south. Negatively aligned Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-day moving average, green line) lines also create a tough situation for the bulls.

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XAUUSD Week 6415

The market is hovering just above the 1283 level by the time I write my analysis and this area produced only a small bounce so far. On the upside, the initial resistance level stands at 1186 and 1190.33 but since the clouds on the daily and 4-hour time frames overlap, it makes more sense to think the 1190.33 - 1203 region as a whole. The bulls will need to pass through this area if they want to take over and tackle the resistance at 1207. Beyond that, sellers will be waiting around the 1214.50 level. Any failure to penetrate the clouds may put extra pressure on the market and drag prices back to the support around 1178/5 - an area that has attracted strong buying and held XAU/USD up since late March. If the bears picture this camp, then we could see a test of 1168/6.

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XAUUSD Daily 6415

 

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Haniya Ahmad 9 years ago Member's comment
Great post.