Gold’s recovery from the last week downfall
Last week we saw that gold fell sharply as the dollar surged on the speculations of a rate hike at the Federal Reserve meeting. The data releases coming from the US were also weighting on the gold’s derisive attempts to growth. On Friday, however, the precious metal managed to stabilize as US released weaker-than-expected labor market figures.
Today’s technical picture shows us the opposite. The gold prices gained their bullish momentum at 1250.56 level (38.2% Fibonacci retracement level) and now they are surging towards the new resistance lines (the next one will be located at 1277.51 – 5th October max). And in this situation my question will be following: how long the gold prices will rise? Is there a steady bullish trend? Let’s turn to the technical chart and figure this out.
The quotes managed to surpass the resistance line located against 200-day MA and now moving towards the next significant level at 1300 (plotted near the 23.6% Fibonacci retracement). I suggest to look at the stochastic oscillator which is now located below the 20 oversold threshold. From this we may conclude there is a room for rise in a short-term. But we don’t expect this bullish trend to be long-lasting since there will be FOMC meeting minutes on Wednesday which could become a landmark event for gold. If the Fed’s members confirm their intention to raise rates, the gold price may fall again down to the significant support level at 1248.87 (38.2 Fibonacci retracement). Meanwhile, you may snatch a certain sum of money on the gold’s short-term rally.