Weakness in the gold price may present the chance to get in on an upside rally.The gold price had a stellar rally in the first half of 2016, but it has recently come in for some profit taking.The pattern of higher lows and higher highs began to falter from the end of July, when the price of the metal peaked at US$1,375/oz. It subsequently traded sideways and then began to form a rounding top pattern. The lateral support at $1,310 held until early October, when the price finally collapsed violently below that support level.If one ever wants to see what a textbook break of support looks like, the move below $1,310 is a great example. That lower break was caused by a strengthening in the value of the US dollar on expectations that a US rate rise before the end of 2016 is looking increasingly likely.A stronger dollar typically translates into weaker commodity prices, as was the case here. The price quickly fell from $1,310 to the 200-day moving average of $1,250. The price is now consol...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.