According to the World Gold Council, Central banks added 37.3 tonnes of gold in December. Yellen's testimony made gold move higher. Gold successfully crossed resistance, at the level of 1,294.0. Gold continues its rally for the sixth day. This is the first rally in a row of six trading days in 2014. We can expect this strong run to end soon.Today traders focus on weekly unemployment data, retails sales and core retail sales. In the daily chart RSI reached overbought levels and hourly charts indicated negative divergence. But the weekly chart indicates that some more upmove is left for the coming days.
During Wednesday's trading session, after making a high at the level of $1,296.2, gold fell sharply and held its 21DEMA level in the hourly chart. Yesterday, we recommended selling with a target at $1,280, but it made a low at $1,284 and took a turn. Today again we recommend selling. In the hourly chart when the price made a high at the level of $1,287.40, RSI indicated an overbought signal at 81. Yesterday, when gold made a new high at the level of $1,296.20, RSI dropped to the 66 levels, which clearly indicated a negative divergence. We could expect the price will come down soon.
Intraday-
Support: 1,287, 1,284, 1,280.
Resistance: 1,296.
If any positive news spreads in the market, it can stretch a bit more its leg towards $1,320.0 and $1,326.0. RSI reached the 66 levels. Trading above $1,298, gold will touch $1,308 and $1,326 where $1,307 is the strong resistance level.
Intraday-
Case 1: sell with sl $1,298 for targets $1,280 and $1,270.
Case 2: Buy above $1,298 for targets at $1,306.
The material has been provided by InstaForex Company - www.instaforex.com
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