Technically, Gold (GLD) Looks Bullish In Here

From a technical outlook, Gold’s near-term outlook now looks Bullish after it took out a 9-month-old Bearish trend line following Thursday’s rally.

The precious Yellow metal may extend its gains now if it manages to hold its own above the broken resistance mark at 1140/2. If it can the Bulls may then target the following marks next:

• 1165/70: previous resistance and 38.2% Fibonacci retracement of XA price swing.
• 1179/80: 200-Day MA
• 1190/92: point D of an ABCD pattern, 127.2% Fibo extension of BC and 50% retrace of XA price swings.
• 1215/20: extended point D (1.618) of an ABCD pattern, 161.8% Fibo extension of BC and 61.8% Fibo retrace of XA price swing. In other words, a Bearish Gartley entry point.

If Gold falls back below the above mentioned old resistance mark at 1140/2 then this will raise some questions about the breakout. For sure this could turn out to be a false break which would bring on a very Bearish outcome.

A break below support and last week’s low at 1120/1 would confirm this scenario, potentially leading further follow-up technical selling this week.

Over all, Gold biased to the Northside near term.

Spot Gold is little changed at 1,146.25 oz as I write this technical outlook report at 11:51p EDT Sunday, 27 September.

India, the world’s 2nd-biggest Gold buyer after China, imposed the import restrictions last year to avert a trade deficit crisis that pushed the Rupee to record lows.

“Restrictions placed on import of Gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on Saturday, 29 November.

Support for Spot Gold comes from jewelry demand from India in the lead up to and during the wedding season, which starts again in late September. India did record a 176% increase in Gold imports in August to US$2-B from about US$756-M.

Overall, the impact of wedding season Spot Gold  buying has faded in recent times as India is no longer the world’s largest Gold consumer, partly because of the on-going government  import restrictions on precious metals. If they are further relaxed, perhaps India will regain its Top spot.

India’s Akshaya Tritiya festival considered by India’s more than 900-M Hindus as an auspicious day to buyGold and Silver, fell on 21 April this year. Bullion is bought in India during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives.

Have a terrific week.

HeffX-LTN

Paul Ebeling