Gold price technical analysis 27 – May, 2013 — The pair of Gold/ U.S Dollar record a rise as an average for the last week trading, but continued the upward movement in the face of strong resistance around $1400 USD/Ounce of gold.
Physical demand for gold still plays an important role in the market. However, the news that preliminary data for industrial purchasing managers’ index in China fell to its lowest level in 7 months. And Mr. Bernanke’s remarks led to the reduction of gold gains. Although Ben Bernanke’s words were more balanced than indicated the main headline , but the Minutes of the Special Meeting of the Federal Open Market Committee showed that some officials want the central bank to adjust the monthly pattern of purchases based on improvements in the economic outlook.
If investors began to believe that the new plan for Fed Bank is the limit of quantitative easing through the rest of the year, this will be supportive of the U.S. dollar, but this is also possible to cause the exit market participants of the currency market and supports return to the funds of gold. Daily look on the market show that the battle between the upward movement and downward movement intensified in the region between $1400 and 1354 USD/Ounce of gold. And sooner or later we’ll get to the point, where the gold will be forced simply to get through in one direction. Until that happens, I’ll stay on the sidelines.
Down-movement, expect to see support at $1372.50 and 1360 USD/Ounce of gold. If prices closed below $1354.50 USD/Ounce, there is a strong probability that the bearish pattern will resume and that the downward movement will challenge the upward movement at $1336.50 and 1320 USD/Ounce of gold. If the pair of gold/USD succeed to hack the are between $1400-1411 USD/Ounce of gold, we can say that the upward movement will demonstrate over gold price but i did not think that it is going to happend today.