Gold's gains capped by rebound in stocks, but technicals bullish.
- Gold was little changed above $1,230 an ounce on Friday as safe-haven gains were capped by an overnight rebound in global equities and oil prices, although technical signals for prices were bullish.
Spot gold was steady at $1,235.38 an ounce by 0043 GMT, after posting a small 0.4 percent gain in the previous session.
Global equity markets got a boost from an upturn in crude oil on Thursday as the market focused on an upcoming meeting of major oil producers that investors hope could stabilize volatile petroleum markets.
Gold prices are closely tracking moves in the equity markets. Its 16.5-percent rally this year has been fuelled by safe-haven bids as equities tumbled on lower oil prices and fears of an economic slowdown. The metal hit a one-year top of $1,260.60 two weeks ago.
Gold has seen a bullish technical formation called the 'golden cross,' where the 50-day moving average goes above the 200-day moving average.
This is the first such occurrence in nearly two years and would be a bullish buy signal for technical traders and momentum-driven investors.
- Asia started the day under extreme pressure with a 2000 lot sell order pushing the gold down to 1221.50, but aggressive Chinese demand and bargain hunters chased the market higher for the remainder of the day.
- Towards the SGE close, another aggressive round of buying pushed gold up through 1240, but the demand was short lived and the market retreated back down towards the low 1230.
- Gold ended the U.S. day session near unchanged in a two-sided trading session Thursday. Some early profit-taking and chart consolidation was offset by fresh safe-haven demand and traders buying the early dip in prices. April Comex gold was last down $1.00 at $1,238.00 an ounce. March Comex silver was last down $0.122 at $15.17 an ounce.
Technically, April gold futures prices closed nearer the session high. Prices are in a nine-week-old uptrend on the daily bar chart and bulls have the firm overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,263.90. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at $1,250.00 and then at this week’s high of $1,254.30. First support is seen at today’s low of $1,221.80 and then at $1,210.00. Wyckoff’s Market Rating: 7.0
Reference: Reuters, Kitco, MKS Group
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