- Crude Soars As Iraqi Supply Fears Reignite, Gold Gains On Haven Demand
- Gold Reverses from Fibonacci Level and 200 DMA
Looking ahead to next week the US economic docket will be rather light
with only retail sales, industrial production and the University of
Michigan Confidence survey on tap. As such, look for broader market
sentiment to continue driving price action with all eyes on the growing
geo-political tensions in the Middle East and Ukraine. Should the
conflicts intensify or if the recent stock sell-off persists, look for
gold to remain well supported with a breach above near-term resistance
keeping our medium-term bias weighted to the topside heading deeper
into August trade. From a technical standpoint, this week’s rally saw a
break of the initial monthly opening range at the 50-day moving
average ($1296) before rebounding off key near-term resistance at
$1320/21.
This region is defined by the 38.2% Fibonacci extension taken from the
late-December rally and the 61.8% retracement of the July decline and
will serve as our bearish invalidation level- a breach above
this threshold shifts the focus higher in gold heading into the August
close with such a scenario eyeing subsequent resistance targets at
$1334, $1345 and $1367/71. Note that the July sell-off saw daily
momentum hold support at 40, suggesting that last month’s pullback may
have been corrective in nature. Ultimately a breach/close above $1321 /
RSI break above 60 is needed to validate this assertion.
Bullish invalidation rests at $1292 with only a break the 200-day
moving average and the August opening range low at $1280 shifting the
focus back to the short-side. Support targets are eyed approximately
every $10 sub-$1280 with more significant technical support seen at the
61.8% Fibonacci extension taken off the decline off the 2014 high at
$1251.
