Gold again prove itself as a hedging machine. Traders choose gold as an investment vehicle resulted, the metal climbed 3-months high. Yellen's testimony was part of the Fed's semi-annual monetary policy report that was released. Thursday, Yellen is scheduled to testify before a Senate committee. If the economy moves in the same phase, the Fed would taper its asset purchases at future meetings.
Weekly basis-
The chart speaks first before the price turned up/down. If we go through the weekly chart given below, the RSI gave a buy signal at the level of 21 (oversold) before the price started going up from June's lows. I divided the price movement from June 28, 2013 till now into three parts. After the price moved to the level of $1,433.3 from its June's low, the metal was corrected up to the level of $1,251. At this time, the RSI was still in positive mode at 35.0. In the second part, gold fell from the level of $1,361.6 to $1,182.1, still the RSI is in positive mode at 39. Now we are in final level part 3 or final phase of the pullback, where RSI reached the 50.0 levels. Overall, the picture shows some more room for upside left.
Support- $1,240, Resistance- $1,326.
Intraday basis-
Yesterday, we gave a buy call for intraday basis. Gold hit all our targets. Gold completed its final pullback at the level of $1293.3. In our previous report, we alerted maximum it can stretch up to $1292.3. 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 65 levels.
Bull factors
· Oscillators are still in positive zone
· Price is holding above 21DEMA
· Gold is trading above 38.2 Fib
Bearish factor
· Unable to cross the resistance level of $1,294, a November 14, 2013 high
· RSI is giving a downward tick
Recommendation-
Sell with sl $1,294 for the targets of $1,280 and $1,276. cmp $1,290.5
Buy above $1,294 for the targets $1,313 and $1,326
Whereas in the hourly chart, RSI is giving a negative divergence. In intraday basis, money is left in sell side. More noise left in the hourly chart indicates sell side.
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