18/05/15 Gold records its biggest weekly gain


XAUUSD Weekly time-frame XAUUSD Weekly time-frame

Gold records its biggest weekly gain as implausible U.S. economic data and diminishing expectations for a near-term rise in U.S. interest rates edged the precious metal to its 3 months high. Closed up at 1,223, price took to the highest level at 1,227 for the week as U.S. dollar continues to lose strength in the unchanged reading of unconvincing economic data. In the wake of the hard news, expectations for a near-term rise in U.S. interest rates looks exceptionally bleak, allowing gold to trace exceptionally higher. Further to that, technical follow-through too, aided prices to the top end of the weekly chart. Should the US economic data continues to remains soft, we are of opinion for the bull rally to push a lot higher.

XAUUSD - GOLD Daily Time-frame XAUUSD – GOLD Daily Time-frame

Price action saw corrective pullback in early Friday session as technical chart consolidation had candlesticks sliding off to the low at 1,211. The extent of the downside move came on the back of rekindled U.S. dollar strength, bidding gold off its bullish momentum for short. For all that it happens, the precious metal did jump back to life as weakness in the U.O.M. Consumer Sentiment figure (U.S. trading session) soon took the yellow metal on a break higher. The sudden bullish rally subsequently had price trading above the 200 days EMA line briefly, taking down the 50.00% Fibonacci Retracement level together. From the way it looks, technical pattern could continue to trace higher in the near term.

Gold Hr chart Gold 4Hr chart

Despite ending the week on a high note, Gold did move in contrasting direction On Friday. The yellow metal eased slightly lower in early Friday trading, which was described as consolidating corrective pullbacks. It was only on the note of the depressing UoM Consumer Sentiment figure (88.60 – released vs. 95.80 – forecast) that had price reversing sharply higher. Overall, technical postures for the yellow metal has improved markedly, to suggest prices can trade higher in the near term. Still, what could come as a fortification to the precious metal would need price to produce a close above the technical resistance at 1,250.

Trend Direction
 S3
S2
S1
R1
R2
 R3
 
 
Slightly Bullish 1,195 1,208 1,213 1,238 1,245 1,254

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