Gold has flirted with the 1810.00 level the past week of trading as consolidation has gripped the commodity. A low of nearly 1800.00 was produced yesterday, but this test of the key psychological level spurred on buying. On the 27th of August, a low of 1783.00 was produced, which challenged lows made on the 26th and 25th respectively, but the ability of support to harden and incrementally increase may be a solid technical sign for bullish sentiment.
Gold has produced a strong dose of volatility the past month. After touching a high of 1832.00 on the 4th of August, the precious metal suddenly demonstrated strong selling on the 6th and then a flash crash on the 8th when a low of nearly 1678.00 was briefly accomplished. However, after hitting these lows which hadn’t been seen since March, gold quickly reacted with buying momentum. Since falling to the August low, the commodity achieved a high of nearly 1825.00 only two days ago.
Speculators who are enticed by gold will notice that the recent consolidation has caused a tight price range in which the upper boundaries are being tested. Current resistance near the 1815.00 to 1817.00 levels should be watched carefully. If these junctures are broken higher and momentum can be sustained above the 1817.00 mark, traders may begin to believe that another leg upwards is about to erupt. The recent tight range with gold is unlikely to hold and speculators should be braced for the potential of fast and volatile trading.
The 1800.00 level is important as support and has held in the short term, but if it should fail and the 1795.00 to 1789.00 ratios begin to see a challeng,e it could mean that gold has additional roam to traverse lower. However sellers, of gold should not be too greedy and use realistic take profit orders to capture profits when they are made.
Speculators may be tempted to suspect gold has the ability to climb upwards near term. Conservative traders who believe current support levels look adequate may want to wait for slight reversals lower towards the 1805.00 ratio to become buyers while seeking higher values.
Gold Short-Term Outlook
Current Resistance: 1817.00
Current Support: 1802.00
High Target: 1832.00
Low Target: 1789.00
