Gold Price Analysis- Feb. 10, 2014 – DailyForex.com
By: DailyForex.com
Gold prices rose %1.9 over the course of the week as dull economic numbers out of the United States and skepticism about the sustainability of the stock market rally increased desire for the relative safety of gold. The XAU/USD pair advanced to as high as 1271.59 after data released by the Labor Department showed that the U.S. economy added only 113K jobs in January (well below expectations of 190K) and settled at $1267 an ounce.
Although Friday’s weak non-farm payrolls report stoked speculations the Federal Reserve may slow the pace of reduction in asset buying, policy makers may not be willing to reverse a direction they started just two months ago. The Federal Open Market Committee’s next meeting is scheduled for March 18-19 and until that time they will have plenty of additional economic data. If future data provides evidence that the U.S. economic recovery isn’t resilient enough to reduce stimulus (or emerging markets’ problems deepen), gold will remain supported in the near-term. From a technical perspective, not being shackled by the descending channel originating back in September is a positive thing.
In addition, the XAU/USD pair has been trading in a bullish channel since early January and also there is a fact that the market had reached the 1433.70 level after bouncing off of the 1180 level last year. However, we closed the week just below the 1268 level which acted as both support and resistance in the past so penetrating that barrier is essential in order to test the critical resistance at 1278. Since the Fibonacci 38.2 and the upper line of the ascending channel intersect at that point, the bears may work hard to defend their camp there. If the bulls manage to shatter this barrier, it is technically possible to see a bullish continuation targeting the 1293, 1307 and 1315 levels. To the downside, expect to see support at 1255/2 and 1246. If the 1246 support is broken the next challenge will be waiting the bears at 1238.
Excerpt from:
Gold Price Analysis- Feb. 10, 2014 – DailyForex.com
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