GOLD Intraday Technical Analysis 2012-08-24

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Gold broke the intermediate resistance of its medium term bullish channel leading to acceleration to the upper limit of its channel at 1,674 suggesting a decline. However, a break of these levels will allow it to release a large potential and initiate a more violent bullish channel.
Technical indicators provide sell signals and evolve in overbuy zone supporting the hypothesis of a decline. Until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase of these days. Stabilization is expected in a short term.
As gold tests the upper limit of its channel, we recommend 2 scenarios: the first one is the hypothesis of a decline where we suggest a sell at the level of 1,674 with the 1st objective at 1,665 and then at 1,660. A breakthrough of 1,677 will invalidate this scenario. The second scenario is the hypothesis of a break of its resistance where we advise a “buy stop”. We recommend to buy the gold as soon as it is broken through its resistance of 1,674 with the 1st objective at 1,685 and then at 1,688. A breakthrough of 1,671 will invalidate this scenario.
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