Gold Price Analysis Sept. 12, 2013

The gold market appears to be stable with the bulls and bears gaining and losing ground almost equally during the Asian session. On Wednesday the XAU/USD pair had a slightly bullish session as the American dollar weakened across the board. Although the pair bounced off of the bottom of the ascending trade channel which the market has been respecting over the last 12 weeks, the lack of strong momentum will certainly be something to watch.

Recently, gold prices have been under the pressure on reduced likelihood of a U.S. military action against Syria. In the meantime, the markets are still waiting to see how the Federal Reserve will react to the changes in the economy and how U.S. politicians deal with the debt ceiling issue. The reduction of asset purchases may be the catalyst that the bears need to push gold prices lower but this could also lead some investors to shift money from equities to gold.

At this point, I think most traders will be reluctant to take sizable positions, long or short. From a technical point of view, trading above the Ichimoku cloud on the daily chart suggests the bulls still have an advantage over the medium term.

However, the XAU/USD pair is trading below the Ichimoku cloud on the 4-hour time frame and we have bearish Tenkan-sen (nine-period moving average, red line) - Kijun-sen (twenty six-day moving average, green line) cross. Because of that, if the 1353 support level is breached, it is probable that prices will continue to grind lower. If that is the case, expect to see support at 1345, 1333 and 1324. To the upside, the 1380 and 1395 levels where the Ichimoku cloud resides will be the first critical barrier for the pair. The bulls will have to break and hold above the 1400 level in order to gain enough traction to challenge the bears at 1416 and 1425.

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Gold forecast 12/09/13

Gold is retesting the rising trend line for the overall short-term bullish trend, in addition to the key horizontal support region that start from 1358.00 to 1347.00; we mentioned earlier that this might be the last defense for the ongoing bullish trend, as breaking below it may signal the resumption of the medium term bearish trend. Technically, we should maintain the bullish view so long as this area is holding.

Support	1358.00	1352.00	1346.00	1340.00	1333.00
Resistance	1368.00	1373.00	1380.00	1393.00	1400.00
Recommendation	Long above 1352.00, targets at 1368.00, 1380.00 and 1400.00. Invalidation with four-hour closing below 1347.00.

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gold forecast

Gold prices (XAU/USD) settled lower yesterday on easing Syrian tensions and speculations the Federal Reserve will adjust the pace of monthly asset purchases based on improvement in the economic outlook (currently the Fed purchases longer-term treasury securities at a pace of $45 billion per month and mortgage-backed securities at a pace of $40 billion per month).

After breaking below the 1380 support level, the XAU/USD pair hit the lowest level since August 22. The pair is currently trading at 1363.86 and it seems that the bears are getting ready to tackle 1353 and 1345 support levels. However, looking at the daily chart from a purely technical point of view, the odds favor a bit of a bounce at this point because the bottom line of the ascending channel which the pair has been following for almost 12 weeks sits here.

If the bulls successfully hold the pair inside the ascending channel and prices reverse, expect to see resistance at the 1380 and 1395 levels which defines the borders of the Ichimoku cloud on the 4-hour time frame. I think that climbing above the 1400 level would lure some investors back to the market and increase the possibility of a bullish attempt to revisit the 1416 – 1425 resistance area. If the bears want to dominate the market, they will have to pull prices below the 1345 level on a daily basis. In that case, I would be looking for 1333 and 1324 which happens to be the Fibonacci 23.6 retracement based on the bearish run from 1795.75 to 1180.21.

Gold forecast

 

The tight range keeps controlling gold trading since morning, which remains fluctuating near the bullish channel support, which makes us keep our waited bullish trend expectations, where achieving it conditioned by holding above 1358.00

Expected trading range for today is between: 1340.00 support and 1400.00 resistance.

Expected trend for today: Bullish