Gold Dips But Will It Rally On Safe Haven Support?

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Gold prices dipped in early morning Asian session on the back of profit taking after seeing solid gains in the overnight US trading of a weak dollar and geopolitical tensions across Syria and Iraq. After being in a strong uptrend over the last couple of weeks, the dollar index has seen some profit taking in the last couple of sessions which has been seen as a huge positive for gold. Also the comments made by ECB chief that it would take all unconventional measures to support a faltering Eurozone economy has also been taken as a huge positive for Gold.

Traders and investors would also be looking forward to reports coming out of US to understand the underlying strength of the US economy giving them an insight about the next move by the Federal Reserve. Traders would also be looking at the truth behind speculations that the Indian government might reduce import duties on Gold which might bolster physical gold demand over the festive season, seen as a huge positive.

On the daily chart for gold, the precious metal has formed a very good support level at the $1205 levels and many believe a move below $1200 could see gold prices plummet further. On the upside $1240 remains the first important resistance and only a close above the level might see the prices move towards $1275 in the near term.  The only cause of concern for traders for the session yesterday was the fact that gold prices could not sustain at higher levels. The momentum indicator for gold is still showing no signs of a reversal which is a cause of concern for traders in the near term.

Actionable Insight:

Buy Gold above $1240 for an intermediate target at $1280

Sell Gold below $1205 for an intermediate target at $1180

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Deepak Tiwari, a law graduate, has been working as a journalist for six years now. He currently writes on Bitcoin, economic, and Forex related news at ForexMinute, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers for readers, traders and brokers. His other specialties include writing on law & governance, finance, internet marketing, careers, politics, international relations & diplomacy, etc.