Since the turn of the year the gold market seems to have been rejuvenated. It is hard to say what caused this complete metamorphosis from a miserable, almost beggarly market, subject to manipulation, to a robust, healthy market based on fundamentals, technical analysis, and the law of supply and demand. After almost twelve months, gold price today can finally be explained.
Most importantly, investors have totally disregarded speculation motivated scenarios that predicted gold prices would sink below the double-bottom levels of 2013.
When you enter the gold market, either for the first time or after a few years, you will be overwhelmed by the amount of information available on the Internet and the media. It is not always easy to tell whether** __**any of this feedback is credible or not and whether it should actually affect your decisions in the short term – but in the long term technical analysis is so far your best bet this year.
As you can see looking at a 6 month price chart, gold came down to $1,180 per ounce. last December and then bounced twice to form a double bottom. The trend line that connected the lows was pointing upwards, as each low was higher than the one before it, and that was an indication that prices were going back up-which they did, to the relief of investors.
The price of gold had a nice run with a brief stopover and double peak in the $1,270 an ounce area, smashing the $1.300 per ounce resistance with high volume and finally slowing down around the $1.350 an ounce level, actually forming a second double peak that confirmed the upward trend as the first high was lower than the second so the trend line was pointing upwards.
This week the price chart was on its best behaviour, moving on either side of the $1.350 an ounce mark and testing the $1.370 level with a third double peak.
Gold price today for buyers
It is not often that gold prices are so predictable through technical analysis. There have been so many outside influences affecting precious metal prices in the last 2-3 months that investors have had to show discipline, maturity and positive psychology.
Gold looks pretty strong even at these levels, and every correction is a buying opportunity. Gradual purchasing at prices below $1.350 an ounce make perfect sense as the $1.300 per oz. mark forms a strong support, while at $1.400- $ 1.450 per ounce there are going to be a lot of sellers liquidating their short term positions with profits of almost 20% from last year lows.
On the other hand, it seems highly unlikely that prices will drop a great deal as demand is high and getting higher, while production of new gold is still shrinking as a result of mining costs.
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