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Gold At Cross Road

Gold prices are now at a critical cross road. After breach the key support level $1336 and even breaching of previous low $1321, gold prices slipped to enter into $1200 region and currently trading below $ 1300 per ounce. Yellow metal is still developing bearish trend but have support at $ 1265-$ 1270 levels because it has already tested a low of 1269 last week. Since October 2012, prices of precious metal are under pressure especially since it posted a high of $1798. Massive panic selling triggered following the breach of $ 1512- $1525 levels. Analysts are expecting that the breach of $1265- $1270 levels will open the way to next supportive level $1160. However, it may reverse to $1320-$1326 levels where it is still resisting. Traders are mostly on the side lines from the precious metal as Ben Bernanke Chairman of Federal Reserve Board has already said that monetary stimulus measures may shrink further this year and possibly wind up next year if the economy indicate the improvement symptoms. Improving situation of US economy will help out FED to cut down 85 billion monthly Monetary Easing program. This news is bound to hit the sentiments of buyers and trigger a bearish trend while hurting the bulls.

Waseem Ahmad

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