FX.co ★ GOLD analysis for February 07, 2014

Overview:

Since our last analysis, gold has been trading sideways, around the price of 1,260.00, our previous analysis is still valid. If the price breaks an area of 1,238.00, we may expect bearish continuation phase and possible testing of the level of 1,222.00. We can observe that strong supply at the price of 1,262.00 has entered on the market and that we got weak demand on the market. Buying at this stage looks very risky. Anyway, if the price breaks the level of 1,275.00 on higher volume, we may see more upward movements and extended major bullish corrective phase.Buying gold looks risky since we are in short- and mid-term downtrend, and we can observe the finish of the major ABCD bullish corrective phase.

Daily pivot Fibonacci points:

Resistance levels:

R1: 1,263.87

R2: 1,267.13

R3: 1,272.40

Support levels:

S1: 1,253.33

S2: 1,250.07

S3: 1,244.80

Trading recommendation: Trading the metal, be careful with buying and try to catch the bearish continuation phase if the price breaks the area of 1.238.00.