Gold: More Declines in Store

The precious metal may in for further declines like the one today.
By Mohammed Isah ,

NEW YORK (TheStreet) -We are seeing gold failing for a second time above the 1,424.30 level as it declined sharply on Tuesday and followed through lower today.

This is a concern to us as that failure could suggest the commodity could see more declines in the days ahead. In such a case, further weakness should target its Nov. 26, 2010 low at the 1,352 level with a violation of there turning risk towards the 1,331.10 level, its Nov. 16, 2010 low and then the 1,317.40 level, marking its Oct. 22, 2010 low.

The commodity should find a respite before turning higher again. On the other hand, to avert its current downside vulnerability, a close above the 1,432.50 level must occur thus turning attention to the 1,450.00 level and then the 1,500 level.

All in all, with gold failing to hold above the 1,424.10 level and collapsing, risk of further decline cannot be ruled out.

Mohammed Isah is a technical strategist and head of research at FXTechstrategy.com, a technical-research Web site. He has been trading and analyzing the foreign exchange market for the past seven years. He formerly traded stocks before crossing over to the forex market, where he worked for FXInstructor LLC as a technical analyst and head of research before joining FXTechstrategy.com. He has written extensively on the forex market and technical analysis and his articles have been featured in The Technical Analyst Magazine, The Forex Journal Magazine, The International Business Times and FXstreet.com. At FXTechstrategy.com, he writes daily, weekly and long-term technical commentaries on currencies and commodities, which are offered to its clients. He also produces

The Professional Suite

for his subscribers. He provides full coverage of the forex market with specific focus on G10 currencies as well as the commodities markets, with focus on five key commodities.

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