Gold Prices August 23, 2012, Technical

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The gold markets hit a four-month high after the Federal Reserve releasing the minutes on Wednesday from the previous meeting. It does appear that the Federal Reserve has serious thoughts of quantitative easing, and this was the last “nail in the coffin” for the gold bears.

For several months now, we have been watching the $1640 level as a spot in which the market had to get above in order to continue higher. This essentially was the top of an ascending triangle, and that was decidedly smashed through during the Wednesday session. There can be little doubt as to what the sentiment is towards gold at the moment as not only did this level get close above, but the daily close is at the absolute highs.

The market certainly looks like it’s ready continue higher at this point, but it should be noted that there is little bit of noise between here and $1700. Because of this, it won’t necessarily be a shot straight up but nonetheless we do look like were going higher. Based upon the measurement of the base of the triangle, we think that this market will continue and target the $1740 level before the move said and done.

With this in mind, we certainly want to go long of this market and will not sell it. We have been saying for some time that the $1500 level is the “line in the sand” for the buyers. Quite simply, we aren’t selling gold until we get below that level. It now appears that that level will be a thing of the past, and we will see that pricing for some time. We are willing to buy this market right here as we believe in the move long-term.

However, if you are living more conservative there probably will be a pullback coming at one point or another from which you can buy this market. We also think that the $1640 level should now be very supportive. As such, if we see a pullback and supportive action close to that level we are more than willing to get aggressively long.

Gold Prices August 23, 2012, Technical

Gold Prices August 23, 2012, Technical

 

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About: FX Empire Analyst - Christopher Lewis

Christopher is a part of the FXEmpire.com analysis team. He writes Forex and Commodities technical analyses on daily and weekly basis. Christopher writes his analyses in a professional and yet simple to understand manner. His analyses are available in both text and videos.

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