Gold Prices for the week of January 21, 2013, Technical Analysis

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Posted January 19, 2013 5:13 (GMT) | By FX Empire Analyst - Christopher Lewis | Print | Font Size       | Add a comment

The gold markets had a strong showing over the last five sessions as we attempted to break above the $1700 level. However, that level did offer a bit too much resistance in order for the buyers to take complete control of this market. Having said that, we still believe that there is more buying pressure than selling pressure in this marketplace, and we also believe that the seasonal trade of buying gold in the first month or two of the year will continue to push this market higher.

We still look like were consolidating overall, and as a result there’s always the possibility of returning to the $1550 level on a serious selloff, but we believe that the buyers have the upper hand at this point time, and will more than likely attempt to reach the $1800 level again. It’s at $1800 as we see a significant battle occurring. If we can get above $1800, $1900 will be the next step and will be followed by an attempted $2000 an ounce.

We believe in the bullish case for this marketplace, especially considering central banks around the world are refusing to let the market dictate the value of their currencies. There currently all in a “race to the bottom”, and as a result devalued currencies will lead investors into other markets looking for some type of real return and preservation of their purchasing power. Because of this, we expect the precious metals complex to do quite well in 2013, although there are many pundits right now it seemed to think that the rally is over.

The reality is that every time the rallies been “over” during the last 10 years, we’ve seen the markets continue to chug higher. There’s no reason to believe that it’s different this time, especially considering central banks are actually buying gold. With that being said, we believe that the demand for gold will continue to climb over the long term, and would become bullish once we got above the $1700 level, or some type of pullback that shows any signs of support whatsoever.

Gold Prices for the week of January 21, 2013, Technical Analysis Gold Prices for the week of January 21, 2013, Technical Analysis

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