Home Potpourri Gold Price Pushing Past Key Resistance Levels

Gold Price Pushing Past Key Resistance Levels

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The past month activity on the international gold price push the price up by about 29%.  The closing as at June 7, 2010 is US$1,293 per troy oz.  So we have to keep abreast of the price of gold closely.

The following charts show the price of gold for the past month and for the past 5 years.

Chart courtesy: http://www.goldprice.org
Chart courtesy: http://www.goldprice.org

The following article is plucked from http://goldinvestingnews.com by

By Melissa Pistilli,

June 7, 2010

Gold’s safe-haven appeal was amplified Monday as the euro weakened further against the dollar amidst rising fears the financial crisis in Europe is deepening and a double-dip global recession may soon be in the cards.

Gold gained nearly $13 Friday to close at $1220 an ounce in New York. In early trading Monday morning, those gains were nearly erased as the yellow metal dropped as low as $1209.80 an ounce. Traders took profits in gold in an effort to cover losses in other investments after the DOW dropped over 3 percent Friday on disappointing US unemployment data and markets around the world weakened on ongoing global economic concerns.

But a late morning $20 bounce put a smile on every gold bug’s face, and by mid-day the precious metal had shot above $1240 an ounce, hitting a high of $1246.20 late in the day. Prices backed off a bit to close at $1241.30 an ounce on the COMEX.

Gold’s biggest jump in four weeks came at Hungary’s expense. The European nation may be facing a similar debt crisis to Greece. This possibility is further stirring the pot of fear and apprehension threatening to boil over in the region, and in the world for that matter, as some top economic analysts are warning of more financial troubles ahead.

Investors are moving out of the euro and into alternatives like the dollar and gold. Gold priced in Euros reached a record high of 1,035.27 as the euro dropped below $1.19, a level not seen since March 2006.

The ongoing sovereign debt crisis in the euro zone continues to provide support for gold prices despite a rising dollar. “There’s a big acceleration in gold prices because people see future deterioration in the euro-zone,” said Lind-Waldock senior market strategist, Adam Klopfenstein.

“Speculative traders such as investment funds or banks are buying back previously sold positions, betting that the metal will continue to reverse its recent dip that took it below $1,200 last week,” reported The Wall Street Journal.

For now, analysts advise gold market watchers to keep an eye on the euro. “If you start to see the euro stabilize, there’s no flight-to-quality need to own gold,” said Matt Zeman, LaSalle Futures Group metals trader. And with a lot of debate over the problems but no talk about viable solutions, the financial issues in the euro zone aren’t expected to clear up anytime soon.

Range-Bound

Gold’s safe haven appeal brought it up to a record high of $1251.40 an ounce in the middle of May. Yet, gold prices have remained range-bound between $1180 and $1240 an ounce for a month now and may continue in this pattern given the current price drivers.

Once gold prices fall below $1190 an ounce, investors spot a good buying opportunity, sending prices higher on discount buying. When the shiny metal breaches $1230 an ounce, large buy orders at European financial institutions are triggered, sending prices hurdling towards $1240 an ounce. Both these levels are now providing support with key resistance seen at the $1240 level at which point investors seek to sell gold to raise cash to buy stocks or cover losses, often sending prices back down near or below $1200 an ounce.

Many analysts expect this tight trading range to continue. Global financial fears will help keep prices supported around $1198 with a top level of about $1230 an ounce, concludes Scott Meyers, MF Global Pioneer Futures Division analyst.

Despite being range-bound for now, some analysts see this as a short-term phase in a long-term uptrend. “The market is on a longer-term and sustainable uptrend,” said Peter Hillyard, head of metal sales at ANZ Bank. “If you detach yourself from the minute by minute, this market is heading higher.”

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I am a Graduate Gemologist trained at the Gemological Institute of America (GIA) in New York City, USA. I hold an MBA degree from Cranfield University, United Kingdom, and a Bachelor degree in Mathematics. My earlier profession was a banker until I found jade in Myanmar (Burma) in the early 90s. I have traveled to the fabled Hpakan Jade mines, and Mogok, the world’s famous rubies and sapphires mines in upper Burma, with my second son. Three of my children are also Graduate Gemologist, GIA, NYC and they deal in diamonds, gemstones and jade. 我是在美国纽约市的美国宝石学院(GIA)接受过培训的宝石研究学家。 我拥有英国克兰菲尔德大学的工商管理硕士学位和数学学士学位。我以前的职业是银行家,直到90年代初我在缅甸接触到玉石。我曾经和我的次子一起去过缅甸上流传说中的哈帕翡翠矿山和莫谷矿山, 莫谷矿山是世界上著名的红宝石和蓝宝石矿山。我的三个孩子都是纽约市GIA毕业的宝石研究学家, 他们专门处理钻石,宝石和玉石.

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