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G. Chandrashekhar

Mumbai, Aug 17 Gold spot rates have collapsed in the last four weeks by over 15 per cent. Technical analysts assert there could be a probe lower.

In the short-term, although the market is over-sold, the lack of bullish divergences suggests that gains are likely to be temporary. In the near-term, one could look for a deeper push into the confluence of support between $800/787 before greater signs of basing, said a London-based analyst. The 60-week average of $830 is crucial. This average has provided support since 2001. A close below it would be an important signal warning of a medium-term turn in trend.

On the top side, a recovery above $845 at least is needed to alleviate the bearish potential. In the medium-term, consolidation above $800/836 is positive so as to keep focus on $1,000 and beyond.

More Stories on : Technical Analysis | Gold & Silver

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