I confess that I know squat about the technical analysis of reading charts. When I try to explain things I talk about fundamentals. But for the chart people, Mo Dawoud explains the technical charts for gold , silver, and other commodities on his MoMoney blog. Once a month he posts a update on the gold chart. This month he wrote "Previously, I stated that gold broke the 1,227 resistance and it is now clear for an uptrend until it hit 1,500. Instead, the chart forms another resistance level at 1,250 per ounce. It made three attempt to break the resistance, but it could not close above the resistance level". He still believes gold will break this resistance before the end of the summer with high volume. Furthermore he believes gold will hit 1,500 before the end of the year. The light volume shows that there is no big sell off in gold which indicates that the “big players” are still in the game and that is a good sign for Main Street investors.
The fundamentals of the economy will dictate when will the price of gold will move above the resistance. If the Federal Reserve decides to continue their quantitative easing (the definition is when the Feds decide to print more money), He believes it will help gold start the uptrend to 1,500 or more. However, He is sticking with his prediction that 2011 will be a great year for gold.
To read more technical analysis on gold or to see the current chart go to MoMoney Blog
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