19th April Gold Trend Analysis

In last night’s website update resistance in gold was listed at 1496-1503 and the high so far is 1498.  Support was listed a 1481-1486 and the low so far today is 1487.50.

London Gold Fix $1495.00 +$9.50

Gold continues to get a bid as the global concerns are many. In addition to the question mark generated by the S&P credit rating standing of US debt yesterday, the gold market continues to mull the sovereign debt threat in the Euro zone, as Greece and Portugal remain in the spotlight. Portugal’s opposition said that they would not block an aid deal for that nation with the IMF and the EU.

The dollar did move up yesterday but has given back half of those gains today.  Price remains above the 75 area but there have  been no resistance levels taken out yet and the dollar is still in a downtrend.

The gold market saw fresh support for gold from a US pension manager yesterday and that seemed to suggest that gold will continue to be seen as a key asset in the coming quarters. With the even number $1,500 level looming overhead, some technical traders expect gold to pierce that level directly ahead.

The gold market is getting some support from favorable Indian gold import projections for the year ahead, as that seems to have countered some of the fear of slowing in the Euro zone. In the end, seeing some doubt cast on the US Treasury market is expected to benefit German Bunds, gold and silver.

While equity markets in Asia were generally lower during overnight trading, stock indices in Europe are generally higher this morning. Early indications have the US stock market slightly higher so far.  Foreign direct investment into China during the first quarter rose by nearly 30% over last year’s levels.

Going to the Chart:

After a 60 dollar move last week,  our daily web update was favoring a consolidation day today in the 1482-1496 price range and so far that is pretty much playing out as expected.  The 1496 area continues to provide resistance again today and might continue into Wednesday.  The 1476-1485 area is where first DAILY support should be encountered if the pullback extends into the latter part of today’s session.

Weekly support is the 1466-1470 area and is a potential  spot for a weekly low should the pullback continue to mid week.   Resistance is the 1496-1505 area —- and if broken to the upside —- the upper purple channel line in the 1515 area would be the next resistance target.

From a trend perspective — the red line is the key support area.   As long as price remains above that area — the trend remains up.  In summary —  gold is consolidating the gains from last week over the past 24 hours and is gearing to try and go after the 1500 area.

by Bill Downey

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