Commodities | Oct 19 2006
By Rudi Filapek-Vandyck
Technical chartists at Barclays Capital are “impressed” with how gold bullion is withstanding selling pressure recently. The chartists point out that selling pressure emerging at the US$600/oz level yesterday only pushed the spot price back to US$581. They are of the view that such a draw back deserves the tag “modest only” and would be inclined to draw the conclusion things are therefore looking quite positive.
The chartists believe that once the corrective selling is out of the market gold bullion may well surge to US$607/oz again. If gold manages to close above US$608/oz the subsequent shift in market sentiment could easily take the precious metal US$10-20 higher, they believe.
Barclays Capital has been expecting choppy trading for a while and the chartists now believe this pattern is likely to persist until early next year when a renewed upward movement is expected to kick in. Elliott wave count suggests there are more highs to come for the spot price of gold, the chartists maintain.
