Recently, It s been an extraordinary movement in the gold market. When the gold reached 1530, then suddenly it was a kind of extremely big selling pressure that made it down to 1321, with only 2 days. Some fundamentalist said that high volatility happened because the Cyprus sold it gold's reserves to bailout their country. Well I guess that' s just one small part of the reasons. Lets take a look at the chart below.
|Gold Price before breaks 1530|
This was the chart when the gold has not yet broken the support line (1530). As we can see, there is a prior uptrend, a consolidation trend, and since it broke the support line, the question now is it the beginning or a downtrend or only a correction? I guess it is a beginning of downtrend at least until around 1100 - 1200. In my personal opinion there are two scenarios where the gold can go down further.
|Simple Set Method|
|Fibonacci Retracement Method|
In Scenario 2, I used a very popular technical analysis, called Fibonacci Retracement. with this analysis the first target for gold price to 1305 - 1318 and then the second target to its 61.8% at 1157.
So lets watch where the gold goes in weeks
Happy Trading All :)