Gold Weekly Technical Report 15-19/10/2012

 The correction we have been calling for has materialized, sending the metal sharply lower. Stochastic has dipped to oversold areas, and price is approaching the 50-days Simple Moving Average around 1735.00-1730.00. Accordingly, the bullish trend is expected to resume after completing the ongoing pullback this week, as the overall short term bullish trend is still intact, and 1720.00-support level should limit any extension to the downside.

The trading range for this week is expected among the key support at 1720.00 and key resistance now at 1805.00.

The short term trend is to the upside targeting 1945.00 per ounce as far as areas of 1520.00 remain intact with a weekly closing.

Support    1740.00    1735.00    1720.00    1700.00    1690.00
Resistance    1755.00    1765.00    1775.00    1780.00    1790.00
Recommendation    Based on the charts and explanations above, we recommend buying gold above 1725.00 targeting 1755.00 and 1790.00. Stop loss with four-hour closing below 1710.00