Supported by the political tension, especially from Lybia, the direction of gold was quite unique last week. The oil price provided another positive factor. The weekly low 90 USD of the New York oil futureswas recorded on Monday but elevated to the 103.40 USD on Thursday, which was almost the level before the financial crisis 2 years ago. Gold kept heading upward in the early of the week. The first resistance 1,420 USD was tested when gold reached 1,418.20 USD on Thursday, but failed under the pressure of selling orders from profit taking. Gold retreated sharply and once broke the phychological support of 1400 USD, and the lowest 1,391.80 USD was recorded. While it closed at 1,402.60 USD, the overall status was not changed. Yet buying was hestitated after the retreat on Thursday. The day low on Friday was 1,399.60 USD and the 1,400 USD level was defensed. As the highest was only 1,411.20 USD within the day, the upside potential should be constrained in the short run.
Beside the jumping of the oil price, the situation of Lybia was also pushing funds into the the gold market. However such kind of positive effects usually only appear at the beginning of similar situation. The trend of last week did not show sustainable buying desire.
Stepping downward, silver performed even weaker than gold last week. 34.30 USD on Monday was almost the highest within the week (34.40 USD on Wednesday). Price slided sideway without sufficient support at high level. The weekly lowest 31.70 USD was recorded on Thursday. A 7.8% cautious adjustment was seen based on this level. Silver closed at 33.30 USD after such such adjustment last Friday.
Technically there was strong resistance around 1,420 USD for gold. Prices struggled within the range of 1,412-1,417 USD in 1-hour chart, and encountered pressure at upper level. The next resistance should be at 1,430 USD while 1,400 USD should be the distinction. A technical negative trend will be formed if gold breaches 1,400 USD in the coming week. The weekly range is expected to be 1,375-1,425 USD. Silver triggered the 34 USD target last week and the current lower support level is 30 USD. The next support would become 28 USD if it breaches the 30 USD level.
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