Gold eases from $2,670 – Dips will attract buyers again as bulls eyeing $2,700-$2,770

More than 500 dead in Lebanon as Israeli air strikes bomb 1600 targets.
Strong safe haven demand fuelling spike in Gold prices, reach $2,670.
Despite overbought conditions, Gold refuses to look back, $2,700 eyed.
Any pullback towards support zone $2,610-$2,570 will be value bargain.

Sunil Kumar Dixit SK Charting

More than 500 people are reported as dead and thousands injured as Israel launched its fiercest aerial offensive in south Lebanon. This is quickly being followed by speculations of a possible ground offensive coming up.

The US has announced plans to send additional reinforcements to already deployed strength. The broader situation signals risk on going higher.

Moreover, yesterday's Consumer Confidence data release came in with sharp decline and markets optimism on another 50 BPS rate cut by fed in November causes further strength in safe haven demand for Gold prices.

China anounced fiscal stimulus and expectations of Chinese buying also provides additional reasons for already raging prices.

Currently, Gold is seen cooling off from $2670 and the metal is trading at $2653 below which next support is seen at $2646-$2638
If retail traders start profit booking, prices may drift lower to local demand zone dynamically positioned at $2610-$2600 while major support and turning point is $2570 that could possibly attract buyers again or also flip the short term trend forr further decline.

On the higher side, the daily time frame RSI(14) reads 75 which may keep prices strong and despite overbought conditions, can extend rally to $2700-$2770 over an extended priod of time.

Author

Sunil Kumar Dixit

SK Charting

Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.

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