• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gnanasekar. T

SPOT gold prices corrected sharply lower after the US dollar rose higher on prospects of more rate hikes, which took the shine of gold as a safe-haven metal.

Spot gold prices fell lower in line with our expectations. As expected, prices corrected further lower towards the trend line support point at $534-35 levels. Good support will be seen at present levels. Crucial support is at $530 being a fibonacci retracement point for the move from $455 to $575. Resistance will now be strong at $550 and as long as prices stay below $561, bearishness in spot gold is expected to continue.

As per our recent wave counts, we believe the current third wave to have ended at $575, provided this high is not taken out in the coming sessions.

A corrective fourth wave move is in progress with elliot targets at $530 levels. RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages in MACD are still above the zero line of the indicator suggesting bullishness to be intact. Only a crossover of the averages below the zero line will signal bearishness again. Negative divergence in both the indicators was one of the reasons for the sharp fall.

Prices are below the short-term 8-day period EMA at $550 an indication of short-term bearishness followed by the 34-day period EMA at $547.

Therefore, look for spot gold prices to test the support levels in the coming sessions.

Supports are at $534, 530 and 525. Resistances are at $548, 553 and 561.

(The author is in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

More Stories on : Technical Analysis | Gold & Silver

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Spot rubber in grip of bears

Copyright © 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line