Gold fluctuated up and down within the week. Downside correction from last weekend extended on monday, that gold fell from 1,428 USD to the weekly low 1,410 USD. At the level certain buying on dip was lured. Under circumtances such as strong oil price, uncertainties in Lybia, silver adjusting at high level, etc., 1,400 USD was regard as an essential support in short term. Around the level of 1,410 USD certain inflowing capital including the speculative funds was seen.
On Tuesday and Wednesday gold kept moving sideway and tested the 1,410 USD support, closing at about the levels during the middle of the sessions. Buying and selling struggled, making gold trading in a narrow range. Price surged upward on Thursday and lower support shifted to 1,420 USD. Weekly high of 1,439.60 USD was tested. Yet gold retreated to 1,412.50 USD in the next session. Again buying on dip supported gold to rally and gold closed higher at 1,428.50 USD finally.
Better than expectation, the U.S. unemployment in March reported last week was 8.8%, which was the lowest in this 2 years. In addition the Japanese Yen reversed from the all time high. The dollar index once rose to 76 with stronger market confidence. Economic conditions of Japan were likely to deteriorate as officials failed to solve the problems about reconstruction as well as the nuclear crisis. It was believed that the Japan central bank would stimulate economic recovery by increasing money supply, offseting the possitive effects from the expected repatriation flows. The greenback was expected to return to the level of 90 against Yen in short term.
Technically the wide supporting range should remain to be within 1,410-1,412 USD. The next lower support would become 1,350 USD if the level was broken. Adjustments did not finished last week. However RSI reduced to below the level of 58, composing a downsloping resistant line with the previous highest. The divergence between price and resistance should be noticed.
Strong silver price was one major supporting factor to gold. Silver continued to surge upward last week. On Friday the commodity experienced a 1.80 USD correction but was able to rebound from 37 USD, closing near the day high of 37.60 USD. Silver should be moving within the upside technical trend with other positive technical indicators. The price ratio of gold and silver had fallen below 38. Imbalance between demand and supply and investive demand continued to strengthen price of silver. And trend would stay if there was no significant change in amrket factors.
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