Spot Gold- Weekly Outlook for February 3rd 2014
- Spot gold ended the last week’s session at $1243.19 a troy ounce, capping five successive weekly gains to settle with losses of 2 percent for the week.
- Gold commenced the week by extending its gains, expanding to more than 2- month’s highs, before reversing to close the last four out of five sessions with losses. For the month of January 2014, spot gold closed with gains of 3.17 percent, the first monthly increase since August of last year and after crashing 28 percent in 2013.
- Gold futures for April delivery trading on the Comex division of the Chicago Mercantile Exchange (CME), closed at $1,239.80 a troy ounce, down 1.93 percent for the week.
The week ahead:
Spot gold settled almost flat on Friday, in a volatile session, scaling back sharply from its November highs. The precious metal looks very vulnerable near crucial short term supports at $1240.00; short term bullish channel with trend lines drawn from the lows of 8th January and connecting 13th January, this year. Close below $1240.00 or breach of $1232.00, prices could skid well below $1200.00, a troy ounce.
Near term resistances placed at $1250.00- 1255.00 and any close above it, we could see last week’s highs being tested again. The medium to long term view remains highly bearish with spot gold likely to target $1000.00- 1050.00 per troy ounce; breakouts for the symmetrical triangle in a downtrend. However, if the yellow metal pulls off a close above $1320.00- 1330.00; breakouts of the symmetrical triangle chart pattern, the bearish view stands negated and the bull- run could extend all the way to $1600.00- 1650.00.
Spot gold remains a sell on rallies from $1275.00- 1280.00 a troy ounce. However, in the likelihood of prices closing above $1285.00, ensure to reverse all short positions as we could witness a near term bull run with spot gold likely to target $1310.00- 1330.00 per troy ounce
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