The Long Term Uptrend in Gold Has Reversed
$GLD
Gold prices traded lower by 0.23% Vs the USD in the 24 hr frame ending 23:00GMT, at 1089.20 oz, reversing its prior session gains.
In the Asian session, at GMT0400, Gold is trading at 1090.7, or + 0.14% higher from Tuesday’s close.
Gold is expected to see 1st support at 1084.87, a break there could push it to next support at 1079.03.
Gold is expected to see 1st resistance at 1095.67, a break there could drive it to next resistance at 1100.63.
The precious Yellow metal is showing convergence with its 20 Hr and 50 Hr MA’s.
In the long term picture, the long term up trend in Gold has reversed and it is now in a long term correction pattern that may push the price back to the 681/1033.9 support zone, with 61.8% Fibo retrace of 253.2 to 1923.7 at 891.3 inside. This Bearish outlook is supported by the sustained trading below 55-Months EMA.
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“Restrictions placed on import of Gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on Saturday, 29 November 2014.
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.
Stay tuned…
HeffX-LTN
Paul Ebeling
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