In General, the situation in the gold market remains bleak in light of weak physical demand and unfavourable technical picture. Weak physical demand is determined by a strike in India, where sellers of gold protest against increase of tax on importation and sale. India is the world's largest importer of the metal. At the same time, the market was disappointed that earlier in the week, the metal was unable to break the psychologically important level of $ 1700.00. This led to the closure of long positions, and this trend has increased the desire of investors commit to arrive before the end of the quarter. This put pressure on gold. However, towards the end of the session, the demand for it grew nearer to price minimums of last week that helped stabilize at current levels of metal.
From a technical point of view, gold will remain under pressure until it is traded below resistance 1685.00-1700.00 which were 100-and 200-day SMA. This is likely to further reduce the potential which remains range supports 1450.00-1520.00. Further confirmation of this trend would break below the nearest support 1625.00. Prospects for gold is only possible in case of a breakthrough and to consolidate above the high 1700.00. This would increase the resistance to 1800.00.
Figure. 1. daily chart
Review granted the company Admiral Markets.
Analyst Eduard Kovalenko.