Gold futures are nearing $1,250 per troy ounce comforted by situation in the Middle East and Portugal. However, the sluggish physical demand in the Asian region and the likelihood of positive labour data in the USA both weigh on the dollar. The fact that the Egyptian President is under arrest increases the probability of the beginning of the civil war in the region that controls the strategic hub for oil transition. Thus, the demand for gold as a safe-haven asset is growing. Dismissals of the Portuguese officials and tension escalation in Syria can be related to the main political factors. Nevertheless, to my mind, it is not right to relate these events to the driving force for the yellow metal. In fact, gold market is waiting for the June labour data from the USA (the statistics will show whether the Fed continue its QE program in the current volume or not). Taking into account the ADP data, the news will not be good for gold.
Increase in non-farm payrolls may trigger scaling back of bond-purchase program which was the main driving force for the gold quotes. As for the physical demand, the gold imports to India dived to 35-40 tons this June which makes up just one fourth of the reading registered in May. The wedding season came to an end and the demand for gold dropped down in India. It should be noticed that this Asian country is the largest gold consumer in 2012. Despite the quotes are stalling at $32-36 per troy ounce in Shanghai and $18 per troy ounce in Deli there is a slight possibility of a rally. The prices can be stimulated by poor labour reports and high unemployment rate. In this case, QE will be maintained at the same level till better days come. Technically, futures will continue to change within the Crab pattern.
On weekly chart gold reached an important support level at 224%. If it can break it through, the quotes may dive to $1,100 per troy ounce (261.8%). However, it is too early to think of a rebound. The market should offset the last decline first and then hover above the psychological level of $1,300 per ounce.
Daily chart demonstrates that the reversed AB=CD pattern is intact. The rebound from 261.8% level was quite expected. In addition, gold will be able to rebound only if the quotes can successfully test the range of $1,280-1,300 per troy ounce. Thus, the situation on the weekly and daily charts is pretty much alike. Crab patterns and AB=CD reveal an important resistance area at $1,280-1,300 and support area at the level of June low.
The material has been provided by InstaForex Company – www.instaforex.com
Gold futures are nearing $1,250 per troy ounce comforted by situation in the Middle East and Portugal. However, the sluggish physical demand in the Asian region and the likelihood of positive labour data in the USA both weigh on the dollar.
The fact that the Egyptian President is under arrest increases the probability of the beginning of the civil war in the region that controls the strategic hub for oil transition. Thus, the demand for gold as a safe-haven asset is growing. Dismissals of the Portuguese officials and tension escalation in Syria can be related to the main political factors.
Nevertheless, to my mind, it is not right to relate these events to the driving force for the yellow metal. In fact, gold market is waiting for the June labour data from the USA (the statistics will show whether the Fed continue its QE program in the current volume or not). Taking into account the ADP data, the news will not be good for gold.
Increase in non-farm payrolls may trigger scaling back of bond-purchase program which was the main driving force for the gold quotes.
As for the physical demand, the gold imports to India dived to 35-40 tons this June which makes up just one fourth of the reading registered in May. The wedding season came to an end and the demand for gold dropped down in India. It should be noticed that this Asian country is the largest gold consumer in 2012.
Despite the quotes are stalling at $32-36 per troy ounce in Shanghai and $18 per troy ounce in Deli there is a slight possibility of a rally. The prices can be stimulated by poor labour reports and high unemployment rate. In this case, QE will be maintained at the same level till better days come.
Technically, futures will continue to change within the Crab pattern.
On weekly chart gold reached an important support level at 224%. If it can break it through, the quotes may dive to $1,100 per troy ounce (261.8%). However, it is too early to think of a rebound. The market should offset the last decline first and then hover above the psychological level of $1,300 per ounce.
Daily chart demonstrates that the reversed AB=CD pattern is intact. The rebound from 261.8% level was quite expected. In addition, gold will be able to rebound only if the quotes can successfully test the range of $1,280-1,300 per troy ounce.
Thus, the situation on the weekly and daily charts is pretty much alike. Crab patterns and AB=CD reveal an important resistance area at $1,280-1,300 and support area at the level of June low.
The material has been provided by InstaForex Company – www.instaforex.com
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