The price of gold extended upside movement on Monday, increasing the price of yellow metal to more than $1075 following the release of some key economic data. The technical bias however remains bearish because of a Lower Low in the recent downside move.
As of this writing, the bullion price is being traded around $1076. A hurdle may be noted near $1085, the high of the bearish pin bar candle that emerged last week ahead of $1088, the high of the recent upside rally and then $1100, the psychological number.
On the downside, the pair is expected to find a support around $1062, the low of the bullish pin bar which emerged on Friday ahead of $1046-$1050 support area, the confluence of psychological number as well as low of the last major dip as demonstrated in the above daily chart.
Chinese Industrial Production
China’s industrial production surprised Saturday with its best showing since June, the latest indication that government stimulus measures may be driving a mild recovery in the world’s second largest economy. Output at factories, workshops and mines increased 6.2 percent last month from a year ago, the National Bureau of Statistics (NBS) said, the first increase since August and a significant jump from October’s figure of 5.6 percent. The figures, which came on robust production of automobiles, synthetic fibres and non-ferrous metals, were higher than the 5.7 percent increase forecasted by economists in a survey.
Considering the overall technical outlook, buying the precious metal on dips still appears to be a good strategy in short to medium term.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT