Gold Weekly Technical Report 8-12/10/2012

Gold has failed to maintain the bullish breakout to form a bearish candlestick formation at 1800.00 resistance level, while Momentum indicators are clearly showing a bearish divergence.  We expect a downside pullback this week which could extend towards 1720.00 support level and retest the 50-days Simple Moving Average. The deeper correction scenario will be negated if price manages to hold above 1800.00.

The trading range for this week is expected among the key support at 1720.00 and key resistance now at 1820.00.

The short term trend is to the upside targeting 1945.00 per ounce as far as areas of 1520.00 remain intact with a weekly closing. 

Support    1765.00    1750.00    1740.00    1735.00    1725.00
Resistance    1780.00    1790.00    1795.00    1802.00    1815.00
Recommendation    Based on the charts and explanations above, we recommend selling gold below 1790.00 targeting 1750.00 and 1720.00. Stop loss above 1805.00