The Recent Dip in Gold Prices
October 20th, 2009 Posted in Chief Analyst Special Report
Starting earlier today, Gold prices experienced a rather sharp downturn. Traders were jumping on the band-wagon and selling like mad to capture the movement, but now caution and good-sense seem to have taken over. The USD’s strong rise at the start of New York market hours helped put a damper on commodities, especially precious metals, but the moment passed and risk appetite is returning. Gold is still heralded as a the main hedge against inflation, and as the economy continues getting better, inflation will become a concern.
As you can see from the chart below, however, the price of Gold has still failed to breach its bullish channel. Once reaching the lower border of this trend, it quickly halted its movement and paused as traders assessed whether the uptrend was really over.
- The chart below is the hourly chart for Gold provided by ForexYard.
- The indicators used are the Stochastic (slow) and Williams Percent Range.
- Point 1: As you can see, the bullish trend was not breached. Suggesting an upward correction may be impending.
- Point 2: The Williams Percent Range has just entered the over-sold zone and will likely help convince traders of the upward pressure on this commodity.
- The Stochastic (slow) still floats in neutral territory and therefore does not indicate any strong movement in either direction, meaning the spike is over and this commodity may actually cool down a bit while the market corrects itself.
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Tags: Au, Au trading, Commodities Trading, Gold, gold and forex, Gold forecast, gold prices, Gold trading, trading gold
