Talking Points:
- Gold Prices Find Support, Attempt to Launch Recovery Anew
- Move Higher Looks Corrective Within Long-Term Down Trend
Gold prices are attempting to return to the offensive having found support after recoiling from resistance capping gains since mid-May. A daily close above resistance at 1138.14, the 23.6% Fibonacci expansion, initially exposes the 14.6% level at 1150.24. On the other hand, a turn back lower that takes out the 38.2% Fib at 1118.52 opens the door for a test of the 50% expansion at 1102.66.
On balance, the dominant long-term trend has favored the downside since consolidation gave way to sustained selling pressure in October 2012. With that in mind, even a sustained near-term push upward higher that clears trend line resistance – thereby clearing the way for a larger advance – is likely to appear corrective in the context of a larger decline. Disturbing the multi-year bearish bias would require a weekly close above $1250.
KEY UPCOMING EVENT RISK:
01 SEP 2015, 14:00 GMT – US ISM Manufacturing (AUG) – Expected: 52.5, Prev: 52.7
01 SEP 2015, 17:10 GMT – Fed’s Rosengren to Speak on US Economic Outlook
02 SEP 2015, 18:00 GMT – Federal Reserve Publishes Beige Book
03 SEP 2015, 11:45 GMT – ECB Interest Rate Decision – Expected: 0.05%, Prev: 0.05%
04 SEP 2015, 12:30 GMT – US Nonfarm Payrolls (AUG) – Expected: 220K, Prev: 215K
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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