Standard Chartered in London talk us through the gold markets and offer a one month trading strategy on gold.
Gold prices are lower at 11am in London.
Gold spot is 0.27% lower at 1116.44 dollars an ounce, Comex gold is lower 0.13% at 1118.40 an ounce.
How to trade gold?
Analysts at Standard Chartered (LON:STAN) have given a technical insight into how to approach trading the gold markets over the next month.
>> We recommend IG Index when spread betting gold prices >>
In a research note, Dan Smith at Standard Chartered says that, "We expected spot gold to tumble towards USD 1,040/oz and find buyers here, which almost happened on the last push lower (USD 1,050/oz approached on 5 February 2010). The previous view – that gold could reassert the medium-term uptrend – needs to change, though, as rising trendline support is giving way and a topping pattern is unfolding."
This observation has laid the foundation for a generally neutral outlook for gold price trading over the coming month.
Smith says:
"A drop below USD 1,020/oz area, where both chart support and the 38.2% retracement of the rally from the USD 686/oz low of 24 October 2008 (coming in at USD 1,019/oz) come into play.
"Moving average studies are bearish in the short term (USD 1,091/oz 20-day moving average, USD 1,119/oz 60-day moving average). However, the medium-term trend is mixed, as the rising 250-day moving average (USD 1,004/oz) comes in below these, and is below the current spot price of USD 1,113/oz." says Smith.
Gold prices - latest
Gold prices rose more than one percent in Europe on Tuesday as investors bought the metal to hedge against financial risk in the eurozone, and as the euro regained some lost ground versus the dollar.
Lingering concerns over the outlook for peripheral eurozone economies, most notably Greece, helped send gold priced in euros to a record high at 817.59 euros an ounce. Spot gold was bid at $1,114.70 an ounce at 1325 GMT, against $1,100.50 late in New York on Monday. US gold futures for April delivery on the COMEX division of the New York Mercantile Exchange rose $26.00 to $1,115.50 an ounce.
Gold prices also benefited from a rebound in the euro on Tuesday, with the single currency recovering some recent losses as investors took profits after concluding much of the bad news on Greece’s public finances was reflected in the market. However, the euro remains vulnerable to further losses, traders said.
