Price of Gold at Resistance Level

Gold Futures Price on CBOT is currently at US$899.30 per oz. Since late October last year, the price of gold has increased 28%, rallying from $700 to the recent high of $927.60. The resistance level on the chart is at $930. Deman for gold has been increasing because investors are shifting their portfolio to this "safe" commodities in times of financial and economic crisis.

The Relative Strength Index (RSI) indicator current reading is lower than the reading on the previous high, suggesting that the momentum in the short term trend has started to weaken. The Stochastic indicator is at the overbought level. With these readings, the price of gold is expected to decline with a target of $860. If the price breaks below $860, then we may look at a lower target of $780. The forecast is only valid if the resistance of $930 is not broken.


Daily Gold futures (CBOT) chart as at 3 February 2009 using NextVIEW Advisor. Click on chart for larger view.

****

Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.