Gold jumped in late trading on Wednesday and its sudden rocket climb will get the attention of speculators who may have bullish sentiment.
Don't let fear prevent profits!
Gold is near the 1790.00 mark in early trading today; the precious metal jumped nearly 40.00 USD in the span of a few hours of trading. Technical traders may have their own interpretations of the dynamic price action and claim that when gold broke through the 1780.00 upwards it broke key mid-term resistance ratios. While this claim may correct, it didn’t hurt gold’s speculative value that inflation data from the US and China have come in higher than expected and propelled nervous buying.
Gold is a speculative asset for short term traders, but it is viewed as a long term investment by financial institutions which fear inflation. The ability of gold to suddenly go from a low of nearly 1757.00 to 1796.00 in the blink of an eye underscores the commodity remains a volatile mix fueled by complex components. After spending the last two weeks trading mostly between 1750.00 and 1770.00 with noticeable outliers, the precious metal has now positioned itself within the midst of its mid-September values.
If support for gold sustains itself above the 1790.00 level short term, it may indicate another test of the 1800.00 juncture will develop. The rocket display achieved in yesterday’s late trading has not been met with a strong reversal lower, which is evidence that gold may find additional buyers who want to speculatively pursue more bullish behavior near term.
Current resistance for gold appears to be the 1793.00 to 1795.00 levels and, if they are consistently tested in the coming hours and begin to look vulnerable, the commodity could demonstrate additional volatility to the upside. However, traders should not get overly ambitious with gold because it has also shown a definite ability to trade within lower depths the past few weeks. Technically, if gold can push above the 1800.00 mark, traders may anticipate more buying, but a move above 1830.00 would cause some speculators who have been sitting on the sidelines to take notice. This type of move is not likely to happen fast.
Technically, if gold can hold current support ratios, conservative speculators who have a notion that the commodity has more upside potential lurks and be tempted to be buyers. Buying gold near the 1791.00 to 1790.00 levels with a stop loss near 1788.00 could be a worthwhile speculative wager for traders who use a cautious amount of leverage.
Gold Short-Term Outlook
Current Resistance: 1795.00
Current Support: 1785.00
High Target: 1815.00
Low Target: 1777.00