Daily Technical Report

By: MIG Bank | Tue, Dec 13, 2011
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Gold: Bearish breakout from triangle pattern targets $1600.

Gold’s bearish breakout from a multi-month triangle pattern targets initial support at $1600/17. This is likely to accelerate from inter-market weakness across related risk proxies such as EUR/USD and equity markets.

Moreover, there is still heightened risk for a much larger decline if we confirm a weekly close beneath $1600/16 and $1530 (200-day MA/swing low), which has not been breached in 3 years!

A number of "bargain hunting" trend-followers will be watching this benchmark "line in the sand" for repeat support or a potential big squeeze lower into $1300 and perhaps even $1040-1000 (12-year channel–floor).

Speculative (net long) flows also support this view having recently breached a key downside level which may threaten over 2 years of sizeable long gold positions. This will trigger a temporary, but dramatic setback that would ultimately offer a unique buying opportunity into summer 2012.

Daily Technical Report

 


 

MIG Bank

Author: MIG Bank

MIG Bank

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