Gold: weekly scenario
By Sergey Ruban
The results of the Fed’s meeting, the geopolitical tensions growth, as well as technical factors supported the precious metal.
The Fed’s Chairwoman Janet Yellen gave a positive assessment of the US economy, but added that the rates would stay low for a long time. These comments surprised some investors who bet against the gold rising, expecting a more hawkish statement from the Fed, so the actual outcome forced them to reduce their losses and buy the metal.
The gold also got the support from the ongoing war action in Iraq, as well as growing tensions between Ukraine and Russia. Many investors buy gold in times of geopolitical uncertainty, as it is believed that the metal retains its value better than other assets.
As a result the gold purchases continued at the end of last week, and the price rose above $1300.00 per ounce. This triggered stop-loss orders and thus accelerated the price growth. In addition, the break above $1300.00 attracted funds as buyers that respond to the current market dynamics have jumped in the bandwagon.
From a technical point of view, a sustained break above the strong resistance range $1265.00/1300.00 opened the way towards resistance at $1330.00. If the bulls overcome this obstacle, it will confirm the uptrend towards the resistance at $1392.00 and $1433.00.
The $1280.00/1300.00 area acts as immediate support now. Only a break and consolidation below this zone can cancel the positive scenario and re-target the gold to the support around $1240.00 and $1200.00.