Gold Rallies as Bulls Remain in Control

The price of gold extended upside movement on Wednesday, increasing the value of yellow metal to more than $1245 an ounce following the release of some key economic news. The technical bias remains bearish because of a Lower Low in the recent downside wave on the daily timeframe.

Technical Analysis

As of this writing, the precious metal is being traded near $1247 an ounce. A hurdle may be noted around $1260, the horizontal resistance area ahead of $1282, the swing high of March 2016 and then $1300, the psychological number.

On the downside, the yellow metal is likely to find a support near $1244, the horizontal support area ahead of $1236, another major horizontal support and then $1224, the low of April 2016 as demonstrated in the above daily chart. The technical bias will remain bearish as long as the 1303 resistance area is intact.

US Consumer Credit Change

Consumer credit rose by $13.4 billion in April following the largest monthly increase on record in dollar terms during March. Revolving credit accounted for much of the slowdown, rising $1.6 billion after the outsized gain of $10.4 billion in the prior month. Nonrevolving credit also moderated, however, increasing $11.8 billion during the month. Consumer credit data can be volatile on a month-to-month basis, so looking at the three-month moving average can be instructive to see longerterm trends.

Trade Idea

Considering the overall technical and fundamental outlook, buying the precious metal around current levels could be a good strategy in short to medium term.

How useful was this post?

Click on a star to rate it!

Average rating / 5. Vote count:

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Latest posts by Usman Ahmed (see all)
with No Comments 1243


Scroll Up