Gold: Nervous Trading Conditions and Anxious Mid-Term Lows

Robert Petrucci

Gold remains near important support in early trading today, but unfortunately for bullish speculators, the lower price levels have proven rather vulnerable short term.

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Gold is trading near the 1740.00 mark as of this morning and an early low yesterday of nearly 1728.00 was seen. Support levels continue to prove rather weak in the short term and traders who have been looking for reversals higher to occur have likely found it difficult timing when the upward movements are going to occur. The precious metal is trading within sight of lows seen in the first week of August and early April of this year.

Global market conditions are proving rather tentative and nervousness is being demonstrated in a wide array of financial assets. This may not change in the short term as investment houses try to gauge their short-term perspectives while also contemplating their mid-term outlooks. Gold is seen as a safe haven asset, but is being confronted, it appears, by the onslaught of a ‘cheap money’ train continuing to be steered by central banks which is fueling speculative elements within global equity indices.

However, the value of gold and its trading is a complex mix of short term speculative wagering and long term perspectives. Traders who continue to believe the precious metal has been oversold in the short term cannot be blamed, but this doesn’t help what has taken place in the actual gold market. As recently as the 3rd of September, gold was trading near the 1830.00 juncture. However, the slide in value for gold saw a swift downturn occur in the middle of this month when the commodity slipped from around the 1807.00 mark towards 1745.00 in the span of two days.

Important support seems to be near the 1730.00 area, but if this level falters there is reason to suspect gold could test the 1725.00 and 1720.00 junctures abruptly. If gold challenges lower depths and the 1715.00 value saw a test, this could create additional technical nervousness because the precious metal would then be within a price range it has not sincerely traded since early April of this year.

Short-term traders should be cautious within gold. Speculators who want to sell and see if there is further room to traverse downward cannot be faulted, but their wagers should use careful stop loss and take profit targets. Traders who want to venture buying positions may want to remain conservative and first see gold sustained above the 1740.00 level before venturing positions on upside momentum.

Gold Short-Term Outlook

Current Resistance: 1745.00

Current Support: 1728.00

High Target: 1754.00

Low Target: 1702.00

Gold

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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