By FXEmpire.com
The gold markets had a fairly soft week over the last five sessions, but support came into the market on Friday that looks set to change the overall tone of the market going forward. The $1,640 level has held as support, and the resulting candle for the week is a hammer that is focused on the area. The area looks set to push prices higher from here.
The $1,700 level above will more than likely be resistive, but the level is a minor one when you look at the bigger picture in this market. The real resistance will be found at the $1,800 level as it looks much more important to the market overall. It is this area that we think the next move will be made to. The breaking of the top of the weekly candle is a buy signal, and we wouldn’t hesitate to buy on that move. The market has been very bullish for eleven years, and we think that the main reasons for this continue.
The central banks of the world are engaging in easy monetary policies, and the banks are also buying gold simultaneously. This can only mean more of a positive tone for this market. The ultimate support in our eyes is the $1,500 level below, and until that area gets broken to the downside, we simply cannot sell at all. The $1,800 level will be crucial to the bulls going forward as well, as breaking above it would signal another leg up in the market.
The trend continues to be bullish, no matter the recent action. The level that we think gold runs to by the end of the year is still $2,000 an ounce, and we are trading it as such. The recent bearish channel has been broken to the upside, effectively invalidating it as well – always a bullish sign for the future. The market will be bought by us time and time again when it pulls back as this type of trading has served us well over the last couple of years.
Gold Forecast for the Week of March 26, 2012, Technical Analysis
Originally posted here
