COMEX Spot Gold CMP: $1,203/oz
Strategy: Sell Below 1,203 (CMP) | Stop @ 1,280| Target @ 1,140 — 1080 — 1025
The technical chart shows that COMEX Spot Gold is trading in a Downside Falling Channel, which indicates that prices may correct from the current level of $1,203/oz. The yellow metal is likely to remain under pressure if prices fail to cross the resistance level of 1,280 on the higher side on daily closing bases.
Gold declined from the high of 1,433 (Point A) in August 2013 and tested the low of 1,045 (Point B) in December last year. Thereafter, gold witnessed a sharp uptrend after testing the Lower Support Trend Line but couldn’t sustain at higher levels after touching Above Falling Trend Line, with prices moving in a range of 200 points.
The immediate support for gold is seen at 1,190 and if it breaks this level then prices would weaken further. Gold’s downtrend remains intact unless prices cross the resistance level of 1,280.
According to the technical chart, the difference between Point A and Point B is 388 points. Gold is likely to test the Lower Trend Line at 1025 and a further fall below this level may take prices to 876 on the lower side (1264-388).
However, if gold reverts from the current level and crosses the resistance of 1,240 then prices may rise towards 1,340 levels, which is 76.8% retracement from Point A to Point B.
