Third-time lucky for gold at $1,800?

Another Monday, and the start of another quarter. We are also heading into the Indian festival season, which is often a period of strength for precious metals prices. Over the last decade, the gold price has on average performed best during Q4. Right now though, the metal is struggling to clear resistance at $1,780. Though some of the selling pressure last week was a result of hedge funds taking profits/squaring books at the end of the quarter, look at a gold price chart for the last year plus and it’s pretty clear that the $1,780-1,800 zone is an important resistance level for gold.

Dan Norcini highlights gold’s year-long trading range at his site – with $1,530-40 marking the bottom, and $1,800 the top. So we could be in for quite a struggle to best $1,800 over the coming days, given its technical significance. This is the third time in the last 12 months that gold has risen this high. Given the wind is very definitely at the bulls’ backs as a result of the recent spate of central bank money printing announcements, there’s a good case for thinking – as Dan does – that it’ll be third time lucky this time though.

Precious metals have started the day well, but commodities are struggling following the release of disappointing economic indicators in China, Japan and South Korea. Brent crude has lost around 25 cents, while copper is also down. The Aussie dollar has come under pressure, with FX traders awaiting the outcome of a Reserve Bank of Australia meeting tomorrow. The RBA is holding interest rates at 3.5% – the highest in the developed world – though some market participants are expecting a rate cut in response to weakening Australian economic data.

Author: The GoldMoney News Desk

 

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