29 Jul 2013
Flash: Recent gains in gold viewed as corrective – TD Securities
FXstreet.com (New York) - Gold neared a stalling point as it approached short-term trend resistance amid heavily overbought oscillator signals, notes the TD Securities Team.
Key quotes
“The market managed to advance a little more this past week, in fact, but our concerns remain more or less the same. Gains from the late June low look merely corrective and, with the market heavily over-extended (and capped by high/low resistance and the 55-day MA in the 1335/40 area), we think the risk of a drop back remains strong.”
“The July recovery has unfolded in a well-defined channel, which is a potential bear flag. A break below the base of the channel (currently 1289.90) is required to signal a renewed leg lower.”
“If a breakdown does occur, we expect gold to stage a repeat of the June sell-off from 1422/1180 (i.e. targeting a drop to 1050 approximately, or new cycle lows).”
Key quotes
“The market managed to advance a little more this past week, in fact, but our concerns remain more or less the same. Gains from the late June low look merely corrective and, with the market heavily over-extended (and capped by high/low resistance and the 55-day MA in the 1335/40 area), we think the risk of a drop back remains strong.”
“The July recovery has unfolded in a well-defined channel, which is a potential bear flag. A break below the base of the channel (currently 1289.90) is required to signal a renewed leg lower.”
“If a breakdown does occur, we expect gold to stage a repeat of the June sell-off from 1422/1180 (i.e. targeting a drop to 1050 approximately, or new cycle lows).”