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"We have some supportive factors in the market such as Saudi Arabia-Iran tensions, devaluation of yuan which have prompted safe have appeal of gold."
- Lee Cheong Gold Dealers Ltd (based on CNBC)
Pair's Outlook
Last Friday the precious metal formed a long lower shadow candlestick, meaning the bears failed to hold to daily gains. Initially they were managing to push prices down to 1,092 (Jan 7 open), but it eventually closed trading near Oct 2015 low at 1,104. We see 100-day SMA (1,108) as the main resistance for the bullion at the moment. Friday's inability to extend a rally after two consecutive days of growth is putting positive prospects at risk. The mid-term bearish target is 55-day SMA/monthly R1 at 1,084. The bulls, however, are hoping to overcome 100-day SMA and climb as high as the monthly R3 at 1,127.
Traders' Sentiment
Distribution between open positions in the SWFX market has been steady during the weekend, as the bulls and bears are holding 55% and 45% of them, respectively.
© Dukascopy Bank SA