<b>Gold Price</b> Analysis- Dec. 10, 2013 - DailyForex.com |
| <b>Gold Price</b> Analysis- Dec. 10, 2013 - DailyForex.com Posted: 10 Dec 2013 01:43 AM PST
By: DailyForex.com Gold continued to gain ground against the American dollar yesterday but remained within the last five days trading range. Comments from Fed policy makers showed that they would like to begin to wind down the quantitative easing program sooner rather than later but the market's reaction was somehow limited. Federal Reserve Bank of St. Louis President James Bullard, who is a voting member of the Federal Open Market Committee, said "Based on labor-market data alone, the probability of a reduction in the pace of asset purchases has increased. A small taper might recognize labor-market improvement while still providing the committee the opportunity to carefully monitor inflation during the first half of 2014". I think yesterday's move was a reflection of the uncertainty in the market and continued short-covering. Investors are well aware of the fact that a few strong jobs numbers don't make a trend and the Federal reserve will probably not want to push the button before the Democrats and Republicans strike a deal to fund the government. Meanwhile, gold charts paint a mixed technical picture. Prices are below the Ichimoku clouds on the weekly and daily time frames but the short term charts are turning positive.
On the 4-hour chart, the pair is trading above the Ichimoku cloud and we also have a bullish Tenkan-sen (nine-period moving average, red line) - Kijun-sen (twenty six-day moving average, green line) cross. With that in mind, I won't be shorting gold until the bears take over and drag prices below the 1225 support at least. In order to confirm a stronger move, look for prices to close below the 1213 support level. In that case, I think the bears will be aiming for the 1200 level next. If the bulls manage to hold the XAU/USD pair above the Ichimoku clouds on the 4-hour chart, we could see the market climbing towards the 1252 level. Only a daily close above that resistance level might provide the bulls the extra power they need to tackle the 1268 level.
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