Gold, currently at 1256 level, was up 1.7% last week.This week's outlook remains bullish too.
Historic data suggests that the precious metal gains pace in early months of the year, particularly January followed by February, and then fade relatively. The precious metal is at levels that were last seen pre-US election. Investors continue to prefer Gold as a safe haven asset. Recent comments from the US administration that much anticipated new Tax reforms will not be available and applied until August this year, uncertainty around the French elections, Brexit related activities within the UK with larger impact including the EU, FED speeches and balanced tone with regard US interest rates etc. are various factors that raise risk in traditional investment instruments like the Stocks. Commodities like Gold and Silver become the obvious investment choice and hence the beneficiaries. Supply and demand economics support the upward price-action for both commodity metals.
On technical analysis front, the daily chart for Gold suggests good enough investor interest and strength, as indicated by the trading volumes and RSI indicator. SMA-50 suggests a smooth upward momentum for next few weeks to come. In the new year, the prices have ranged within a narrow ascending converging channel that continue to take Gold price further upto 1270 - 1290 level. Downward pressure at the top-end around 1290 exists from the descending yearly slope line. However prior to that there will be intermediate resistances offered at key intervals immediate being 1270. This resistance zone from the past is as indicated by the rectangular price zone.
On the flip-side, support is seen around 1225 level (last week low) before the metal slides further and remains supported further. As always Gold continues to offer quick win trade opportunities throughout the days in coming weeks.