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O’Hare: Gold stalls ahead of Swiss vote

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Gold has rallied in the past few weeks, fuelled by profit taking and short-covering ahead of a referendum in Switzerland on Sunday, which could force the Swiss Central Bank to triple its gold reserves. Technical analyst Steve O’Hare from First4Trading expects the vote to be a “No”, which would make the premium on gold evaporate. 

Gold posted a 55-month low on November 7. Prices have since corrected, resulting in a 6.75% rally towards the 61.8% Fibonacci retracement level of 1208 USD/oz. This week has resulted in a trend of lower highs and attention now turns to the crucial support area between 1178-1182 USD/oz. The short term bullish channel also lends support here and a clear break should signal a return to the yearly lows. 

Steve looks to sell gold (XAUUSD) on a break of 1175 USD/oz. His targets are the recent low of 1132, the 161.8% Fibonacci extension at 1103 and an AB=CD target of 1085. Steve’s stop on this trade is a break back above 1210 USD/oz

Trade idea parameters
Period: 1-2 weeks
Entry: Steve looks to sell XAUUSD on a break of 1175 USD/oz
Stop: A break above 1210 USD/oz
Target: 1132, 1.103 & 1085 USD/oz