The gold market has experienced much flatter trading since the start of November compared to what we’ve been accustomed too for a very long time. In recent weeks we’ve seen the market hovering around the 1700.00 area with little direction.
Tuesdays trading saw gold once again using 1700 as an area of support. In early trading the market was drawn towards the level; however later in the day we saw a rejection resulting in a bullish daily pin bar.
The pin bar is very similar to the one seen on the 1st November which also rejected the 1700 area.
Our identified level of support is further strengthened by a 61.8% Fibonacci retracement. A look at the chart below clearly shows the market rejecting both the 1700 area and the 61.8 Fib level. Its important to take note of how yesterdays price bounced almost perfectly off the 61.8.
With the strong support levels we’re seeing in the gold market and the bullish price action chart patterns, we will be looking to buy into this market; either when we break the highs of the pin or at a 50 – 61.8 retracement of the pin. Initial targets will be at the most recent swing high (1762) with the possibility of further gains, possibly up to 1800.