‘Most of Asia is already off for the holidays, which is a good time for many to short the metal … You can see the bids are very weak, which shows the demand right now.’ – Ronald Leung, Lee Cheong Gold Dealers (based on Reuters)
The yellow metal continues its way lower, as it entered its fourth consecutive session of decline on Friday. However, the bullion has stopped in the middle of a strong support cluster, which is made up of the weekly S2 at 1,185.14, monthly R1 at 1,184.64 and the 23.60% Fibonacci retracement level, which is located at 1,182.37. As already during the morning hours the metal managed to reach out below the cluster, it can be assumed that it is not strong enough to keep gold from continuing to decline in the near future. In such case, it is most likely set to fall as low as 1,176.66 level, where the 55-day SMA is located at.
SWFX traders are neutral regarding the yellow metal. In the meantime, 58% of trader set up orders are to buy the metal.