Gold bullish in short term


Gold surged last week and gave a closing at $1247 /ounce after a release of the worst non-farm payrolls report in more than 35 months.

Important levels

The precious metal may face an immediate resistance around $1250 that is a horizontal resistance zone as well as 38.2% fib level ahead of $1267, high of last up move and then $1271, 50% fib level as shown below. 

Gold bullish in short term

On downside Gold may find support at $1239, 55 DMA ahead of $1224 and then $1180-82, historical support zone.

Higher High (HH) on daily chart?

If we look at daily chart it also shows that bullion is poised for Higher High (HH) after posting Higher Low (HL), look at the following chart;

Gold bullish in short term

A combination of HL and HH is always considered a very good sigh of steady bullish momentum.

Last correction wave of EW pattern about to end

EW pattern shows that precious metal has almost ended the last correction wave as charted below:

Gold bullish in short term

More downside movement would prolong the wave C which is not desirable as per EW theory.

Double Bottom Pattern

If you analyze the weekly chart closely you will find an ideal double bottom price pattern as shown in the following chart:

Gold bullish in short term

The highest point between the two bottoms is at $1433 which is called the neckline of Double Bottom Price Patten and this has to be broken for steady upward movement towards final target of $1750.

Contrary to all the above technical indications, we may note some clear negative divergence in four-hour chart which points to downside risk before further upward movement.

Fundamental Scenario

We have some important fundamental events due this week that include the US Retail Sales and Inflation data for the month of December. On the other hand we saw some significant rise in physical demand from China at the beginning of 2014. If this trend continues; it would further uplift the price of precious metal.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: Dollar Falls from 10-month High Market Analysis: US Currency Continues to Grow Ahead of GDP Data Release Market Analysis: Gold and Commodity Currencies Resume Their Decline Market Analysis: EUR/USD Takes Hit While USD/CHF Surges Market Analysis: The Yen and European Currencies Headed to New Lows

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: Inflation, EUR/USD, S&P 500, OIL

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. Inflation Still Dogs the

Forex Analysis

Market Analysis: Dollar Falls from 10-month High

EUR/USDThe euro rose on Thursday as the dollar retreated since investors remained cautious ahead of key inflation figures due on Friday. Data on Thursday showed the US economy maintained fairly strong growth in Q2, with an unrevised annual rate


US 30 Analysis: Dow Jones Finds Support

September is likely to be the second month in a row that the Dow Jones (US 30) stock market index declined. The last time this happened was... also in September, a year ago. Important economic data was published yesterday: → According

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.