26/01/15 Gold ended another week with gains

260115 XauUsd Weekly

Gold ended another week with gains as investors welcomed the ECB announcement of stimulus measure with most notably XAU/EUR hitting its highest level since April 2013. Price complex continues to be capped at the 1305 to 1310 with resistance level peaking at $1,307.40 on Thursday (22/01/15). Despite slipping off its high, the precious metal is still up more than 9% in the first three weeks of the year.

260115 XauUsd Daily

XAU pulled back from its rallying on the impact of a stronger dollar which prices see-sawed between gains (Fibonacci Extension of 161.8%) and losses (Fibonacci Extension of 141.4%) in the wake of the European Central Bank’s quantitative easing. Coupled with the ADX indicator on the D1 chart, it is expected that the market would see a bit of consolidation after what has been a strong start to the year, as strength of the gold bull starts to wane off.

260115 XauUsd H4

The yellow metal found significant support post ECB to touch a high of USD $1,307.50 on the H4 charts, where it ran into significant selling pressure thereafter. Prices have since pared some of those gains with spot gold down at 1,295 level. A rally could be limited as more attention is focused on the Federal Reserve and the U.S. economy in the week ahead. Short term, gold could continue to thread lower with 1,278 as the first visible support level.

Trend Direction
 Slightly bearish  1245  1259  1278  1307  1322

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