The yellow metal has fallen nearly 40% from its 2011 high above $1,900 to trade below $1,200 at the start of this week, mirroring Christopher Columbus’s own fall from grace as more of his transgressions have been brought to light. In recognition of the upcoming Columbus Day “holiday” in the United States, we wanted to highlight why gold may not be irreparably damaged.
Here are 5 reasons gold may have reached a near-term bottom at $1,180.
1. Strong previous support at $1,180. This support level put a floor under the metal’s price in both June and December of 2013, leading to a 200-point rally in each case.
2. Bullish Gartley Pattern projects a rally off $1,180.
3. Gold prices are on track to complete a bullish Piercing Candle* formation this week, signaling a shift from selling to buying pressure and marking a possible bottom in the chart.
4. Slow stochastics turning higher from oversold territory.
5. Finally, gold is also catching a bid on global risk aversion.
See full story on resourceinvestor.com
Photo courtesy of resourceinvestor.com