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Gold Forecast: Prices rise as China buys gold

Spot Gold Forecast: Gold price rallied by a gap of $10 in early trade on Monday, driven by the geopolitical situation and fresh buying demand.

With traders going into safe mode after Syrian rebels captured the capital Damascus and took control of the country, rising uncertainty about the near future supported the gold (XAU/USD) price.

Fresh Demand from China

Another key driver of the yellow metal this morning was fresh demand from China, as the PBOC resumed gold purchases after a six-month pause.

The technical picture on the daily chart improved (though still lacking a clear directional signal) as the price moved towards the top of the near-term range ($2666, also the 50% retracement of the $2718——$2607 bear-leg, reinforced by the 55DMA).

Gold Targets

Persistent bullish momentum and rise above 10/20DMA develops initial positive signals, which will seek confirmation on break through continuous range ceiling, opening the way for extension towards targets at $2692 (Fibo 61.8% and 76.4% respectively) and $2705 (near psychological level).

Holding and closing above broken 10DMA ($2640) to keep near-term fresh bull run intact, with larger bullish bias seen above daily cloud base ($2630).

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

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