Gold Price in Trading Range

Gold price currently at 817.50, is still in the trading range between 831 (the R2 of last week, now R1), and the low of December 5th/08 of 740.50.

R1 is quite strong so at least a minor correction at or around this level will not be a surprise. I don’t expect the correction, if it occurs, to go below $782.

The short term trend in gold is up, with the markets’ upside target around 871.


Gold chart as at 11 December 2008 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

MACD – up in positive territory.
Stochastic – up
EMA 20 – turning up (short term indicator).
R1 – resistance zone between 816.50- 829.50.
R2 – 871.
S1 – 782.
S2 – a support zone between 742-731.

Diagonal lines – creating a potential channel of price movement. The top diagonal line around R2 is parallel to the bottom line and may provide extra resistance to the market rise.

***

Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

Upcoming Workshop from Don Schellenberg:
Trade and Prosper in FOREX by Don Schellenberg | 8 Jan 2009 (Kuala Lumpur) | 17 - 18 Jan 2009 (Kuala Lumpur)