, IncMarch 6, 2010 – After confidently moving through a number of resistance points during the past week, some analysts see gold prices as being ready to challenge the year-to-date high of $1,150 set in mid-January. While the US dollar has made gains particularly against the euro, there are indications that it is losing strength, suggesting that the gold rally could be moving higher.
As reported by Franklin Sanders of The Moneychanger, “Gold prices successfully tested $1,090 support last week and battered its way through resistance at $1,100, $1,118, $1,125, and $1,132, not to mention that in February $1,120 had turned gold back. Yesterday gold discretely corrected, bounced off $1,125 and today closed over $1,132 at $1,134.80.” Many traders use technical indicators such as the Fibonacci Ratio to determine key points of resistance and support for gold prices.
Mr. Sanders continues by saying, “All these things set the gold price up to challenge the January high at $1,150.00 closing. That will be the final witness that gold has entered a new rally, ready to test its mettle once more against the $1,226.40 all time intraday high.”
The basis for this belief is the falling wedge pattern which some analysts identified from December 3rd to the end of February; analysts such as Mr. Sanders suggest that this pattern “has broken out upside. Another harbinger of higher prices.”
The US dollar, which generally trades against gold prices, appears to have lost momentum for its rally. Sanders states that the dollar has “double topped at 81.20+ this week. To resume its uptrend the US Dollar Index would have to climb over 81.30. Fall will accelerate once it pierces 79.80, then question will become, Can it hold above 78.50?”
As trading patterns continue to be met, the gold price may be preparing to challenge both the 2010 high and the all-time of the precious metal.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
