Gold (01.12.2014) reverse from $1207 mark which we mention as first resistance for bulls. However fall from mention level should taken as correction or profit booking but swiss gold referendum added more fuel & created panic selling.
Now gold is trading around $1275 & we have witness a sharp bounce from recent low $1142 made just after a NO answer from swiss gold referendum. The bounce producing a major among trader that how actually this NO going to react. Here is the most possible answer.
Swiss gold referendum YES would force swiss banks to buy tonnes of gold to increase the gold holding from 8% to 20% but a NO answer is actually not going to change anything for gold normal trading. The panic selling come in first trading session was not supported by volume (see chart), while the NO answer avoided the immediate buying from swiss banks but now it is mandate for central bank to buy gold from open market or off market.
Coming to technical picture, gold made a low of $1142 & now trading above $1169 which represent the 61.8% fibonacci retracement of last upside move till $1207. A stability above this mark with volume & a very positive divergence on day chart suggest that gold already digested swiss result & a technical upside move will continue for coming trading session. A break above $1207 will provide more strength & we may witness a quick move towards $1247.
MCX GOLD traded lower with spot gold however the correction more deeper due to removal of 80:20 rule by indian government & low volume. Still on technical front gold was able sustain above previous low. This particular move forming a double bottom pattern which is well supported by positive divergence as shown in the chart. Channel resistance situated around 26780 & if this is broken we may witness a sharp move 26900 & more.
Swiss gold referendum could prove a big bear trap if above technical picture stay alive.
Best of luck
Note – Above technical analysis is not a buy/sell recommendation. For recommendations Contact Us
trap succeed ;))