The pair of gold / U.S. dollar continued to move in the down channel by the end of the Asian session, in which the precious metal touched its lowest level since 19 September 2010.
The precious metal hacked below the lowest level since April 16, at the level of $1321.52 USD/ Ounce a huge selling process take place in the market, which had configured by the Fed’s announcement on Wednesday. After the announcement of the central bank, the Bank President, “Ben Bernanke” made a reference to the reduction in the quantitative easing program. China’s Purchasing Managers Index, came very disappointing to the market, was another catalyst Quicken in the process of falling gold.
According to the report issued by the HSBC Bank, the primary indicator of industrial activity fell to 48.3 from 49.2. In the meantime, the CME Group raised the initial margin for Comex gold by 25%. Since we penetrate to outside the scope of former senior consolidation (between 1532 and 1795 almost) you might say that gold prices will reach the level of $1266 USD/ Ounce as the next, support level, for the down trend movement.
When we get to that point, I expect to see some profit collection, and perhaps this process cause a decline for the precious metal price. In the event marked proved that we will be temporary bottom of the current channel but it may not take place in the market today, it is possible to get back to the level of $1300 USD/ Ounce. After that level, the first challenge will be waiting for upward movement is the level of $1320 USD/ Ounce, and if that level is breached, the upward movement will be waiting at $1345.50 USD/ Ounce. If the downward movement wins the battle, we will watch prices fell to below the level of $1266 USD/ Ounce, the following objectives will be at $1240 and 1218 USD/ Ounce by the end of the summer scope.