Gold Rallies to Near 8-week High as Dollar Slides - 29 April 2016

Alp Kocak

Gold prices advanced for a fourth straight session on Thursday as weakness in the dollar and Bank of Japan's decision to stand pat on policy bolstered demand for the precious metal. BoJ officials held off on expanding monetary stimulus, saying that they want to wait and see how the introduction of negative rates in January affects the economy. Soft U.S. economic data also helped the market. The Commerce Department reported that gross domestic product rose at a 0.5% annualized rate in the first quarter.

The XAU/USD pair finally broke strongly above the upper limit of the triangle - this also marked a departure from the consolidation zone that we had been watching since mid-April. As a result, gold prices rose to the highest level in almost 8 weeks during the Asian session today. Yesterday's rally pushed prices back above the 4-hourly Ichimoku cloud and caused short-term charts to realign with longer-term bullish inclinations. However, the area between the 1275 and 1280 levels has been troublesome in March so it would not surprise me if prices stall there ahead of the weekend.

Daily

If that is the case, prices may return to 1263-1258.60 area to test the broken resistance as a support. But of course, in order to reach there, the bears will have to drag prices below 1269 first. Falling through 1258.60 would suggest that we are heading towards 1251. On the other hand, If the bulls are able to maintain control and penetrate the 1280/75 area, it is likely that XAU/USD will test 1285/88 afterwards. Beyond that, the bulls will be targeting the 1295 level.

4H

Alp Kocak
Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.